ALEXANDRIA, Va. (6/24/09)--In the "first of many communications" with stakeholders, the National Credit Union Administration (NCUA) in a letter published on Tuesday outlined the "benefits and requirements" of its recently enacted corporate credit union stabilization fund.
The letter also described "the actions taken to implement the legislation" and summarized how those actions will affect the National Credit Union Share Insurance Fund capitalization deposit and future premium assessments.
Click the title link for the rest of the story.
courtesy of cuna.org
Wednesday, June 24, 2009
Top 10 emerging risks for CUs outlined at ACUC
BOSTON (6/23/09)--Today's fraud landscape is becoming more complex, featuring extensive intertwined risks--some old but with new wrinkles and some emerging at the pace of new technologies. The emerging risks will require credit unions to adopt rigorous, cross-channel fraud monitoring strategies, a CUNA Mutual risk expert said Monday.
Ann Davidson, speaking Monday to a standing room only crowd at the America's Credit Union Conference (ACUC) and Expo in Boston, recommended taking a holistic view of fraud. That means realizing that a particular fraudulent act may not directly or immediately result in a loss but may later manifest itself in another form.
Click the link for the rest of the story.
courtesy of cuna.org
Ann Davidson, speaking Monday to a standing room only crowd at the America's Credit Union Conference (ACUC) and Expo in Boston, recommended taking a holistic view of fraud. That means realizing that a particular fraudulent act may not directly or immediately result in a loss but may later manifest itself in another form.
Click the link for the rest of the story.
courtesy of cuna.org
Mica notes young members are most optimistic
BOSTON (6/23/09)-- Credit Union National President/CEO Dan Mica welcomed attendees at the America's Credit Union Conference in Boston, saying that despite the tough year for the nation's financial institutions, credit unions can be optimistic. He discussed the optimism of younger consumers--76% of 18 to 29 year olds say their personal financial situation will improve. "That's optimism," he said. The movement projects it will have 100 million members in the next few years. "Young people need it (financial services) and want it. We can stand tall in this."
Credit Union National Association President/CEO Dan Mica welcomed attendees at the America's Credit Union Conference in Boston Monday saying that despite the tough year for the nation's financial institutions, credit unions can be optimistic about the future.
Credit unions' capital is at 10%. "Every other financial institution would love to have 10%," he noted. Banks have regulatory hearings on their backs, shareholders on their backs and more "but we don't have a single group in that situation." Credit unions are No. 1 in trust, he said citing a survey released May 26 by Forrester Research Inc.
Click the link for the rest of the story.
courtesy of cuna.org
Credit Union National Association President/CEO Dan Mica welcomed attendees at the America's Credit Union Conference in Boston Monday saying that despite the tough year for the nation's financial institutions, credit unions can be optimistic about the future.
Credit unions' capital is at 10%. "Every other financial institution would love to have 10%," he noted. Banks have regulatory hearings on their backs, shareholders on their backs and more "but we don't have a single group in that situation." Credit unions are No. 1 in trust, he said citing a survey released May 26 by Forrester Research Inc.
Click the link for the rest of the story.
courtesy of cuna.org
Frank advocates expanded powers for CUs
BOSTON, Mass.(6/23/09)--Credit unions should be given expanded powers, House Financial Services Committee Chairman Barney Frank told Massachusetts Credit Union League members on Monday.
Speaking before a meeting held in conjunction with the Credit Union National Association's America's Credit Union Conference, Frank said that credit unions have not been singled out for negative treatment under financial regulatory reform because they "were zero part of the current financial upheaval."
Click the link for the rest of the story.
courtesy of cuna.org
Speaking before a meeting held in conjunction with the Credit Union National Association's America's Credit Union Conference, Frank said that credit unions have not been singled out for negative treatment under financial regulatory reform because they "were zero part of the current financial upheaval."
Click the link for the rest of the story.
courtesy of cuna.org
Monday, June 22, 2009
CREDIT CARD FUNERAL
Click the link to enjoy a funny little video called The Credit Card Funeral. ABC recently did a story on this video, and very timely! Enjoy!
This is a Credit Card Funeral that Judge Robert Cilley officiated for Pam Young. You may recognize him as the husband of Flylady (aka: Marla Cilley) He did a decent job of officiating the ceremony honoring the slicing and dicing of several credit cards (with much audience participation), followed by a touching grave side service. And although the video is mainly a spoof for fun regarding credit card use, there is much truth to be found about the nature of the credit card.
Flylady hosts a website filled with information and tools to help people "declutter" their homes, finances, lives, offices, and anything else that needs a good cleaning. Her website has tons of ideas, tips, & even products to help the "SHE" (side-tracked home executive.) Flylady's website is http://www.flylady.net/.
Pam Young can help you get out of debt with her new book, The GOOD Book: Get Out Of Debt book. Miss Young's website is http://thegetoutofdebtbook.org/.
This post is strictly for fun but if you find useful information and tools to help you with your finances that's even better!
Cheers!
Tia Davis,
Marketing
Cornerstone Credit Union
This is a Credit Card Funeral that Judge Robert Cilley officiated for Pam Young. You may recognize him as the husband of Flylady (aka: Marla Cilley) He did a decent job of officiating the ceremony honoring the slicing and dicing of several credit cards (with much audience participation), followed by a touching grave side service. And although the video is mainly a spoof for fun regarding credit card use, there is much truth to be found about the nature of the credit card.
Flylady hosts a website filled with information and tools to help people "declutter" their homes, finances, lives, offices, and anything else that needs a good cleaning. Her website has tons of ideas, tips, & even products to help the "SHE" (side-tracked home executive.) Flylady's website is http://www.flylady.net/.
Pam Young can help you get out of debt with her new book, The GOOD Book: Get Out Of Debt book. Miss Young's website is http://thegetoutofdebtbook.org/.
This post is strictly for fun but if you find useful information and tools to help you with your finances that's even better!
Cheers!
Tia Davis,
Marketing
Cornerstone Credit Union
New-car tax credit now applies in all states
BOSTON (6/22/09)--That new-car smell just got better, thanks to legislation that provides tax incentives to new-car buyers.
The U.S. Department of Treasury recently announced that the American Recovery and Reinvestment Act of 2009's new-car tax deduction now extends to consumers in states without a sales or excise tax (boston.com June 17). These states include Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon.
Click the link for the rest of the story.
courtesy of cuna.org
The U.S. Department of Treasury recently announced that the American Recovery and Reinvestment Act of 2009's new-car tax deduction now extends to consumers in states without a sales or excise tax (boston.com June 17). These states include Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon.
Click the link for the rest of the story.
courtesy of cuna.org
Syndicated TV show features co-ops, CUs
MADISON, Wis. (6/22/09)--A short segment about cooperatives and credit unions will run on national television over the next few weeks.
Stacy Johnson, host of a syndicated television program called Money Talks News, just launched the segment that includes Paul Hazen, president/CEO of the National Cooperative Business Association, talking about the nature of cooperatives.
click on the link for the rest of the story.
courtesy of cuna.org
Stacy Johnson, host of a syndicated television program called Money Talks News, just launched the segment that includes Paul Hazen, president/CEO of the National Cooperative Business Association, talking about the nature of cooperatives.
click on the link for the rest of the story.
courtesy of cuna.org
Milwaukee CUs face merger pressures
MILWAUKEE (6/22/09)--Two suburban Milwaukee credit unions are dealing with regulatory requirements to address undercapitalization. One option is for the two credit unions to merge into healthier credit unions.
Click the link for the rest of the story.
courtesy of cuna.org
Click the link for the rest of the story.
courtesy of cuna.org
Ohio CUs among FIs sued over ATM fee notices
TOLEDO, Ohio (6/22/09)--An Ohio credit union is among five financial institutions in the state being sued over ATM charges.
Plaintiff Maryann S. Kuzila filed a class-action suit Tuesday in the U.S. District Court of Toledo against Fremont (Ohio) FCU and four banks.
click the link for the rest of this story.
courtesy of cuna.org
Plaintiff Maryann S. Kuzila filed a class-action suit Tuesday in the U.S. District Court of Toledo against Fremont (Ohio) FCU and four banks.
click the link for the rest of this story.
courtesy of cuna.org
What happens when 401(k) collides with pink slip?
WASHINGTON (6/19/09)--With the nation's unemployment rate hovering close to 10% coupled with a scarcity of job openings, more workers are experiencing a head-on collision between their 401(k) and job loss. One of this week's H&FF Radio show guests explains what this "head-on crash" means for your retirement plans.
Home & Family Finance airs Sundays at 3 p.m. EDT 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:
"Keep Your Credit Card and Personal Information Safe on Vacation," with Lyn Chitow Oakes, chief marketing officer, Trusted ID, Redwood City, Calif.;
"Credit Card Repayment Relief: New Terms Offer Better Options for Consumers," with Gail Cunningham, vice president of public relations, National Foundation for Credit Counseling, Silver Spring, Md.;
"Job Loss and What It Means to Your 401(k)," with Jordan Amin, American Institute of Certified Public Accountants, New York, N.Y.;
"21st Century Transportation for a 21st Century America," with David Goldberg, Transportation for America, Washington, D.C.; 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, also known as WesCorp, and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve our country worldwide.
For more information, read "Job-Hunting Tactics for This Recession" in Plan It: Retire Ready Toolkit.
courtesy of cuna.org
Home & Family Finance airs Sundays at 3 p.m. EDT 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:
"Keep Your Credit Card and Personal Information Safe on Vacation," with Lyn Chitow Oakes, chief marketing officer, Trusted ID, Redwood City, Calif.;
"Credit Card Repayment Relief: New Terms Offer Better Options for Consumers," with Gail Cunningham, vice president of public relations, National Foundation for Credit Counseling, Silver Spring, Md.;
"Job Loss and What It Means to Your 401(k)," with Jordan Amin, American Institute of Certified Public Accountants, New York, N.Y.;
"21st Century Transportation for a 21st Century America," with David Goldberg, Transportation for America, Washington, D.C.; 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, also known as WesCorp, and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve our country worldwide.
For more information, read "Job-Hunting Tactics for This Recession" in Plan It: Retire Ready Toolkit.
courtesy of cuna.org
Internet use tripled from 1997 to 2007 says Census
CHICAGO (6/19/09)--Credit unions might want to make more use of online delivery channels for their members, if the use of the Internet among the general population is any indication. Household Internet use has tripled in the decade between 1997 and 2007, reports the U.S. Census Bureau.
In 2007, about 62% of households used the Internet. That's an 18% increase from 1997--the first year the Census Bureau began noting the population's Internet habits. Sixty-four percent of survey respondents age 18 and older accessed the Internet from any location in 2007. That compares with 22% the decade before.
Of households accessing the Internet in the most recent survey, 82% did so with a high-speed connection, while 17% had dial-up connections.
In 2007, households in Alaska and New Hampshire had the highest rates of Internet use from any location, such as work, home or public access, for residents aged three and older. Mississippi and West Virginia had among the lowest rates of Internet use--52%.
Education played a role in how much the population accessed the Internet. Eighty-seven percent of individuals aged 25 and older and who had earned a bachelor's degree accessed the Internet from any location in the most recent study. That compares with 74% of those with "some college," 49% of those with a high school diploma, and 19% of those without a high school diploma.
As for race and origin, 69% of whites use the Internet, compared with 51% of blacks, 73% of Asians, and 48% of Hispanics.
It is no surprise that younger people were more likely to have online access--73% of 18- to 34-year-olds access the Internet. That figure is more than double the 35% of consumers aged 65 and older online. Of children age 3 to 17, roughly 56% used the Internet.
courtesy of cuna.org
In 2007, about 62% of households used the Internet. That's an 18% increase from 1997--the first year the Census Bureau began noting the population's Internet habits. Sixty-four percent of survey respondents age 18 and older accessed the Internet from any location in 2007. That compares with 22% the decade before.
Of households accessing the Internet in the most recent survey, 82% did so with a high-speed connection, while 17% had dial-up connections.
In 2007, households in Alaska and New Hampshire had the highest rates of Internet use from any location, such as work, home or public access, for residents aged three and older. Mississippi and West Virginia had among the lowest rates of Internet use--52%.
Education played a role in how much the population accessed the Internet. Eighty-seven percent of individuals aged 25 and older and who had earned a bachelor's degree accessed the Internet from any location in the most recent study. That compares with 74% of those with "some college," 49% of those with a high school diploma, and 19% of those without a high school diploma.
As for race and origin, 69% of whites use the Internet, compared with 51% of blacks, 73% of Asians, and 48% of Hispanics.
It is no surprise that younger people were more likely to have online access--73% of 18- to 34-year-olds access the Internet. That figure is more than double the 35% of consumers aged 65 and older online. Of children age 3 to 17, roughly 56% used the Internet.
courtesy of cuna.org
ATM fraud ring arrests made, stole from Florida CUs
JACKSONVILLE, Fla. (6/19/09)--Police in Jacksonsville, Fla., recently made three arrests in a complex ATM fraud ring involving more than 100 people. The ring defrauded a number of Florida credit unions.
Ophel Day, Tony Fudge and Jacob Dunn were arrested for depositing bad checks into ATMs and then making withdrawals or purchases before the checks bounced, according to federal investigators (WJXT Jacksonville June 17).
The fraud has cost local credit unions from $300,000 to $500,000, police said. Affected credit unions include Jacksonville-based Vystar CU and Mulberry, Fla.-based Community First CU.
More arrests will be made, Paul Elliot of the Secret Service, told the newspaper.
The scam begins when account holders sell their ATM cards and personal identification numbers for up to $500 to a "recruiter" in the ring, authorities said. The recruiter then passes the information on to the scam's ringleader. Individuals giving up their card then report the card as stolen (Jacksonville.com June 17).
Recruiters deposit checks that are counterfeit, stolen or from closed accounts into ATMs. The active accounts allow a percentage of the money deposited to be immediately withdrawn, with subsequent withdrawals and purchases from businesses conducted before the check is returned, authorities said.
Account holders often report that their cards are stolen or lost after the thefts occur. Many are reimbursed for losses they claim--which results in a double whammy to the financial institutions involved, authorities added.
In the end, costs are borne by legitimate customers through fees--or in the case of credit unions through the increased cost of conducting business, police and a credit union official told Jacksonville.com.
courtesy of cuna.org
Ophel Day, Tony Fudge and Jacob Dunn were arrested for depositing bad checks into ATMs and then making withdrawals or purchases before the checks bounced, according to federal investigators (WJXT Jacksonville June 17).
The fraud has cost local credit unions from $300,000 to $500,000, police said. Affected credit unions include Jacksonville-based Vystar CU and Mulberry, Fla.-based Community First CU.
More arrests will be made, Paul Elliot of the Secret Service, told the newspaper.
The scam begins when account holders sell their ATM cards and personal identification numbers for up to $500 to a "recruiter" in the ring, authorities said. The recruiter then passes the information on to the scam's ringleader. Individuals giving up their card then report the card as stolen (Jacksonville.com June 17).
Recruiters deposit checks that are counterfeit, stolen or from closed accounts into ATMs. The active accounts allow a percentage of the money deposited to be immediately withdrawn, with subsequent withdrawals and purchases from businesses conducted before the check is returned, authorities said.
Account holders often report that their cards are stolen or lost after the thefts occur. Many are reimbursed for losses they claim--which results in a double whammy to the financial institutions involved, authorities added.
In the end, costs are borne by legitimate customers through fees--or in the case of credit unions through the increased cost of conducting business, police and a credit union official told Jacksonville.com.
courtesy of cuna.org
Thursday, June 18, 2009
Consider pros, cons of rent-to-own your home
ATLANTA (06/17/09)--In an environment of poor credit and tight financing, some home sellers are offering rent-to-own options. While this approach may seem appealing, buyers need to understand both the advantages and disadvantages (CNNMoney.com June 4).
In a rent-to-own, also called lease-option, the renter pays an upfront fee--typically 5% of the home's purchase price--for the option to eventually own. The renter and seller draw up a contract detailing the monthly rental payments and expiration date, typically 12 months to 36 months. A portion of each month's rent is income for the seller, while the other part is a "credit" toward the potential buyer's down payment. When the contract terminates, the buyer can either put the option fee and rental credits toward the purchase of the house, or opt out and lose what's been paid in.
Before signing on the dotted line, buyers should understand the pros and cons (Forbes.com March 2):
Pros:
No need for loan approval. With lending standards tight, many consumers may find their current credit score doesn't qualify them for a mortgage, making rent-to-own a viable option.
Buys time to boost credit score. A lease option allows hopeful owners to develop a good bill-paying history, build equity and position themselves for securing a loan in a few years.
Builds up down payment. Down payments of 20% to 30% required by lenders can be daunting to potential buyers. With rent-to-own, down-payment contributions compound monthly.
Locks in price. Even if a buyer with a higher offer comes along, your price is locked in to the contract. And, if property values rise, your lower price becomes a deal. Read the fine print. Be sure the seller cannot terminate or renegotiate the arrangement; if home prices increase, the seller will want more money, or an out.
Cons:
Mortgage rates may increase. Mortgage rates haven't been this low since the 1950s. If you opt for the rent-to-own option, you may face higher interest rates at the end of your contract.
Fees may get expensive. If you don't buy at the end of your contract, you lose your option fee and all the money you paid in rent--possibly thousands of dollars.
Late payments not forgiving. In most rent-to-own contracts, late rental payments void the rent credits for that month. Sellers pocket the money that otherwise goes toward the down payment.
Home values may fall. If property values decrease, a renter paying a rate based on the original list price ends up being overcharged.
Rent-to-own options may help those serious about buying a home, but it can be a money trap for others. Before agreeing to a rent-to-own, do your homework. Ask for a title report to make sure the property is free of liens, get an appraisal and an inspection, and seek legal help to avoid contract mishaps. You will have to pay for these services.
For more information, read "Use Home Value Search Engines" in Plan It: Retire Ready Toolkit.
courtesy of cuna.org
In a rent-to-own, also called lease-option, the renter pays an upfront fee--typically 5% of the home's purchase price--for the option to eventually own. The renter and seller draw up a contract detailing the monthly rental payments and expiration date, typically 12 months to 36 months. A portion of each month's rent is income for the seller, while the other part is a "credit" toward the potential buyer's down payment. When the contract terminates, the buyer can either put the option fee and rental credits toward the purchase of the house, or opt out and lose what's been paid in.
Before signing on the dotted line, buyers should understand the pros and cons (Forbes.com March 2):
Pros:
No need for loan approval. With lending standards tight, many consumers may find their current credit score doesn't qualify them for a mortgage, making rent-to-own a viable option.
Buys time to boost credit score. A lease option allows hopeful owners to develop a good bill-paying history, build equity and position themselves for securing a loan in a few years.
Builds up down payment. Down payments of 20% to 30% required by lenders can be daunting to potential buyers. With rent-to-own, down-payment contributions compound monthly.
Locks in price. Even if a buyer with a higher offer comes along, your price is locked in to the contract. And, if property values rise, your lower price becomes a deal. Read the fine print. Be sure the seller cannot terminate or renegotiate the arrangement; if home prices increase, the seller will want more money, or an out.
Cons:
Mortgage rates may increase. Mortgage rates haven't been this low since the 1950s. If you opt for the rent-to-own option, you may face higher interest rates at the end of your contract.
Fees may get expensive. If you don't buy at the end of your contract, you lose your option fee and all the money you paid in rent--possibly thousands of dollars.
Late payments not forgiving. In most rent-to-own contracts, late rental payments void the rent credits for that month. Sellers pocket the money that otherwise goes toward the down payment.
Home values may fall. If property values decrease, a renter paying a rate based on the original list price ends up being overcharged.
Rent-to-own options may help those serious about buying a home, but it can be a money trap for others. Before agreeing to a rent-to-own, do your homework. Ask for a title report to make sure the property is free of liens, get an appraisal and an inspection, and seek legal help to avoid contract mishaps. You will have to pay for these services.
For more information, read "Use Home Value Search Engines" in Plan It: Retire Ready Toolkit.
courtesy of cuna.org
CUNA-BusinessWeek: Housing market bottoming out
MADISON, Wis. (6/18/09)--The U.S. housing market may be "bottoming out, which is crucial for the rest of the economy," Bill Hampel, chief economist for the Credit Union National Association, told BusinessWeek Tuesday.
Data issued June 15 indicated housing starts rose 17.2% from April to May to an annual pace of 532,000, BusinessWeek said.
Construction was being started at a pace above 2.2 million units per year in early 2006. In previous housing recessions, housing starts bottomed at 800,000, but the current housing market is "bottoming out at an incredibly low level" of below 500,000, Hampel told the publication.
A rise in household formation rates--young people moving out on their own, for example--could occur in the next couple of years, he added. "It's a fairly bullish picture for first-time home buyers," Hampel said.
However, because home prices are still declining, many Americans--including even those who are not moving soon--don't feel as good about their wealth because the level of their home equity is still shrinking, BusinessWeek said.
"The household sector is still heavily burdened by the debt it took on in the last 10 years," Hampel told the publication.
courtesy of cuna.org
Data issued June 15 indicated housing starts rose 17.2% from April to May to an annual pace of 532,000, BusinessWeek said.
Construction was being started at a pace above 2.2 million units per year in early 2006. In previous housing recessions, housing starts bottomed at 800,000, but the current housing market is "bottoming out at an incredibly low level" of below 500,000, Hampel told the publication.
A rise in household formation rates--young people moving out on their own, for example--could occur in the next couple of years, he added. "It's a fairly bullish picture for first-time home buyers," Hampel said.
However, because home prices are still declining, many Americans--including even those who are not moving soon--don't feel as good about their wealth because the level of their home equity is still shrinking, BusinessWeek said.
"The household sector is still heavily burdened by the debt it took on in the last 10 years," Hampel told the publication.
courtesy of cuna.org
Higher credit scores more apt to see ID theft
COSTA MESA, Calif. (6/18/09)--Consumers having a high credit score are more likely to become victims of identity theft, because fraudsters using their identities find it easier to get credit, according to a new study from Experian.
There is a "significant connection" between high credit scores and becoming a victim of identity thieves, with the occurrence rate of identity fraud rising dramatically as credit scores increase, said the Costa Mesa, Calif.-based credit bureau's fraud and identity solutions group, which conducted the study.
The findings "should herald a warning for consumers and businesses alike," said Hiq Lee, senior vice president and general manager of Experian's fraud and identity solutions group. "Identity fraud can damage an individual's finances as well as a company's bottom line and reputation with consumers" (LoneStar Leaguer June 17 and Credit Card News June 9).
Experian has no data that suggest thieves specifically target high scorers.
Instead, the credit bureau explained that consumers with high credit scores tend to get approved for accounts on a more regular basis. Then, when fraudsters use their identification, they too are more apt to be approved for credit because of their victims' scores. The higher score means easier credit for the fraudsters; lower credit scores mean the fraudster's application is more likely to be rejected.
The top 20% of borrowers--who had ratings of 815 and above on the VantageScore 501-990 scale--were victims of 48% of all self-reported identity theft cases.
Consumers in the average-to-very good credit ratings--762 to 814--were victims in an additional 13% of fraud cases. Those with lower scores accounted for less than half the fraud cases, while those in the lowest 20% made up 4% of fraud cases.
The credit bureau examined about 800,000 fraud cases reported in 2007 and 2008. It parsed the data by victims' VantageScores. VantageScore is an Experian rating system. The more popular FICO scores were not surveyed. Data was provided by bank card issuers, retail card issuers, retail banks, mobile phone providers and utility companies.
courtesy of cuna.org
There is a "significant connection" between high credit scores and becoming a victim of identity thieves, with the occurrence rate of identity fraud rising dramatically as credit scores increase, said the Costa Mesa, Calif.-based credit bureau's fraud and identity solutions group, which conducted the study.
The findings "should herald a warning for consumers and businesses alike," said Hiq Lee, senior vice president and general manager of Experian's fraud and identity solutions group. "Identity fraud can damage an individual's finances as well as a company's bottom line and reputation with consumers" (LoneStar Leaguer June 17 and Credit Card News June 9).
Experian has no data that suggest thieves specifically target high scorers.
Instead, the credit bureau explained that consumers with high credit scores tend to get approved for accounts on a more regular basis. Then, when fraudsters use their identification, they too are more apt to be approved for credit because of their victims' scores. The higher score means easier credit for the fraudsters; lower credit scores mean the fraudster's application is more likely to be rejected.
The top 20% of borrowers--who had ratings of 815 and above on the VantageScore 501-990 scale--were victims of 48% of all self-reported identity theft cases.
Consumers in the average-to-very good credit ratings--762 to 814--were victims in an additional 13% of fraud cases. Those with lower scores accounted for less than half the fraud cases, while those in the lowest 20% made up 4% of fraud cases.
The credit bureau examined about 800,000 fraud cases reported in 2007 and 2008. It parsed the data by victims' VantageScores. VantageScore is an Experian rating system. The more popular FICO scores were not surveyed. Data was provided by bank card issuers, retail card issuers, retail banks, mobile phone providers and utility companies.
courtesy of cuna.org
Wednesday, June 10, 2009
Get linked to power up your job search
NEW YORK (6/10/09)--Nothing beats face-to-face networking to build your career. But do you know how to use professional networking sites to find a new job?
Reviewing new technologies to see which ones are worth keeping up with may seem like a full-time job, but it's worth the effort (MarketWatch.com May 27).
Recruiters are taking advantage of professional networking sites like LinkedIn to recruit and accept applications from candidates. John Walker, co-founder of Talent Evolution, a career education and training company based in southern California, says that recruiters follow status updates in search of keywords related to the industry in which they are seeking candidates (Secrets of the Job Hunt.com June 2).
The benefits of posting frequently and using common keywords include increasing your visibility, getting found by search engines, building your network, and being able to search for employment via sites with robust job-listing portals.
Consider starting with LinkedIn. Its more-than-41 million members come from 200 countries worldwide. They include executives from all of the Fortune 500 companies and 170 different industries.
Your profile is the most important part of professional networking. Walker has used LinkedIn for years, as both a job seeker and a recruiter. Take your profile seriously--it could make or break your job search:
Complete your profile. Don't leave any sections incomplete. This will improve the likelihood of your profile being found in search results.
Use a flattering photo. Make sure it is sized no larger than 80 x 80 pixels.
Use common keywords. Name your skills in a way that makes your profile easy to read and easy to find.
Post recommendations. Get them from people you work with or from those who know your work personally. Posting recommendations turns your profile into a living document with power behind it.
Join LinkedIn groups. They help you connect with professionals in your area of expertise and facilitate your job search. Use groups to get leads on possible employers, and connect with people who might be looking for employees now or in the future.
For more information, read "Job-Hunting Tactics for This Recession," in Plan It: Retire Ready Toolkit.
courtesy of cuna.org
Reviewing new technologies to see which ones are worth keeping up with may seem like a full-time job, but it's worth the effort (MarketWatch.com May 27).
Recruiters are taking advantage of professional networking sites like LinkedIn to recruit and accept applications from candidates. John Walker, co-founder of Talent Evolution, a career education and training company based in southern California, says that recruiters follow status updates in search of keywords related to the industry in which they are seeking candidates (Secrets of the Job Hunt.com June 2).
The benefits of posting frequently and using common keywords include increasing your visibility, getting found by search engines, building your network, and being able to search for employment via sites with robust job-listing portals.
Consider starting with LinkedIn. Its more-than-41 million members come from 200 countries worldwide. They include executives from all of the Fortune 500 companies and 170 different industries.
Your profile is the most important part of professional networking. Walker has used LinkedIn for years, as both a job seeker and a recruiter. Take your profile seriously--it could make or break your job search:
Complete your profile. Don't leave any sections incomplete. This will improve the likelihood of your profile being found in search results.
Use a flattering photo. Make sure it is sized no larger than 80 x 80 pixels.
Use common keywords. Name your skills in a way that makes your profile easy to read and easy to find.
Post recommendations. Get them from people you work with or from those who know your work personally. Posting recommendations turns your profile into a living document with power behind it.
Join LinkedIn groups. They help you connect with professionals in your area of expertise and facilitate your job search. Use groups to get leads on possible employers, and connect with people who might be looking for employees now or in the future.
For more information, read "Job-Hunting Tactics for This Recession," in Plan It: Retire Ready Toolkit.
courtesy of cuna.org
New branches (in this economy?) are a success
MADISON, Wis. (6/10/09)--Some credit unions have announced branch closures as part of their belt-tightening during the recession. But others are experiencing success with newly opened branches--despite the nation's economic turmoil. How do they do it?
San Francisco-based Patelco CU is reporting success with its new Financial Resource Center, which opened Feb. 17 in downtown Danville, Calif. The facility is the $4.129 billion asset credit union's 18th branch on the East Bay.
Since it opened, more than 525 people have joined the credit union at that location and are taking advantage of its products and services. It attributes its success to a series of community events and to its location.
During its first eight weeks of operation, the new branch played host to a number of community events, such as a Pet Adoption Day with Tony La Russa's Animal Rescue Foundation, and a preview exhibition and reception for Danville Open Studios to promote local artists.
At its ribbon-cutting ceremony on April 16, five residents played Patelco's Mountain of Cash game for a chance to win up to $50,000. Although no one won the full amount, each contestant took home $250 for participating. More than 75 people attended that event.
The events, coupled with cross-promotions with other local merchants and a "perfect location," have propelled the new branch into one of Patelco's most popular branches.
"In a time when many banks and credit unions have unfortunately needed to close certain branches, ourselves included, it's great to see this location flourish. It truly is the perfect place for Patelco to make a difference to the community and the local economy," said Danville Branch Manager Toni Sciaky.
Ken Burns, Patelco's new CEO, noted that the credit union "is continuing to expand in certain key market areas, and we are certainly glad to see that not-for-profit, community-minded banking has struck a chord with Danville residents."
Louisiana FCU, a $113.7 million asset credit union in La Place, La., opened its Gramercy branch in May in the heart of St. James Parish. The new location features a drive-up ATM, full-service lobby, and drive-through services (eNews June 3).
A ribbon cutting ceremony and some attractive specials helped drive business to the location. The credit union offered a five-month term share certificate special at a 5% rate through the end of the month. The offer brought $1 million in less than three weeks to the credit union.
The new ATM onsite dispersed random $50 bills instead of $20 bills as an incentive to drive traffic to the new machine. Members also received $100 when they opened a new checking account with direct deposit.
"It's exciting to see the community support the branch," said Mia Perez, director of marketing and business development. "We're happy to be able to provide alternative financial solutions to our members and potential members in this market."
Education First FCU, a $252.9 million asset credit union in Beaumont, Texas, is finding growth in a real-world lesson in what a local financial institution with a solid balance sheet can achieve, President Jimmy Lackey told The Beaumont Enterprise (June 4).
The credit union has expanded by seven offices in the past year, all of them in supermarkets in the area. As a result, Education First is building a $528,209 training center next to its main office. "We've added 30 employees in the last year. We needed a training facility," Lackey said.
The credit union saw an increase in assets of about 25% from last year, to its current $270 million assets. Lackey attributes the growth to the new locations.
courtesy of cuna.org
San Francisco-based Patelco CU is reporting success with its new Financial Resource Center, which opened Feb. 17 in downtown Danville, Calif. The facility is the $4.129 billion asset credit union's 18th branch on the East Bay.
Since it opened, more than 525 people have joined the credit union at that location and are taking advantage of its products and services. It attributes its success to a series of community events and to its location.
During its first eight weeks of operation, the new branch played host to a number of community events, such as a Pet Adoption Day with Tony La Russa's Animal Rescue Foundation, and a preview exhibition and reception for Danville Open Studios to promote local artists.
At its ribbon-cutting ceremony on April 16, five residents played Patelco's Mountain of Cash game for a chance to win up to $50,000. Although no one won the full amount, each contestant took home $250 for participating. More than 75 people attended that event.
The events, coupled with cross-promotions with other local merchants and a "perfect location," have propelled the new branch into one of Patelco's most popular branches.
"In a time when many banks and credit unions have unfortunately needed to close certain branches, ourselves included, it's great to see this location flourish. It truly is the perfect place for Patelco to make a difference to the community and the local economy," said Danville Branch Manager Toni Sciaky.
Ken Burns, Patelco's new CEO, noted that the credit union "is continuing to expand in certain key market areas, and we are certainly glad to see that not-for-profit, community-minded banking has struck a chord with Danville residents."
Louisiana FCU, a $113.7 million asset credit union in La Place, La., opened its Gramercy branch in May in the heart of St. James Parish. The new location features a drive-up ATM, full-service lobby, and drive-through services (eNews June 3).
A ribbon cutting ceremony and some attractive specials helped drive business to the location. The credit union offered a five-month term share certificate special at a 5% rate through the end of the month. The offer brought $1 million in less than three weeks to the credit union.
The new ATM onsite dispersed random $50 bills instead of $20 bills as an incentive to drive traffic to the new machine. Members also received $100 when they opened a new checking account with direct deposit.
"It's exciting to see the community support the branch," said Mia Perez, director of marketing and business development. "We're happy to be able to provide alternative financial solutions to our members and potential members in this market."
Education First FCU, a $252.9 million asset credit union in Beaumont, Texas, is finding growth in a real-world lesson in what a local financial institution with a solid balance sheet can achieve, President Jimmy Lackey told The Beaumont Enterprise (June 4).
The credit union has expanded by seven offices in the past year, all of them in supermarkets in the area. As a result, Education First is building a $528,209 training center next to its main office. "We've added 30 employees in the last year. We needed a training facility," Lackey said.
The credit union saw an increase in assets of about 25% from last year, to its current $270 million assets. Lackey attributes the growth to the new locations.
courtesy of cuna.org
CUs draw strength in global presence--WOCCU chair
MADISON, Wis. (6/10/09)--Credit unions' ethical leadership has given them both integrity and strength during the current financial crisis, according to Melvin Edwards, World Council of Credit Unions (WOCCU) departing chair and board representative from the Caribbean Confederation of Credit Unions.
However, credit unions can gain even greater influence by speaking as a single global body, supporting credit unions in developing countries and increasing the movement's influence worldwide, he added.
"Credit unions are engines of social and economic development, and too many governments have missed the value of their influence," said Edwards, a St. Kitts and Nevis native whose two-year term as WOCCU chair concludes in July at WOCCU's World Credit Union Conference in Barcelona, Spain. "Credit unions everywhere need to recognize that we exist as a global movement, and we need to speak in one voice."
Much of credit unions' strength is based on their financial transparency, not-for-profit cooperative natures and focus on member service, aspects that set them apart from many for-profit financial institutions. Their emphasis on education helps financially strengthen not only the credit unions, but also the members they serve, Edwards said.
In the end, he said credit unions' "people helping people" philosophy enables them to grow the movement in developing countries and hone individual members' and their own capabilities to weather economic storms like the global financial crisis.
"We need to invest more, not only in educating ourselves but also our members, correcting their assumptions about easy credit and refocusing them on increased savings and safe investments," Edwards added. "The more members know about managing their own funds, the easier it will be for them to keep their credit unions safe, accountable and honest."
During Edwards' tenure as chair, WOCCU expanded its membership to include 40 systems or institutions representing 69 countries. It also increased its influence with legislative and regulatory bodies, including the Basel Committee on Banking Supervision, International Accounting Standards Board, European Union, Group of 20 (G-20) Nations and others.
WOCCU issued a set of International Consumer Protection Principles to set member service standards for credit unions worldwide last year, and WOCCU's technical development efforts have employed new technology to reach the rural poor in Mexico, a program it hopes to expand to other countries later this year.
"I have been very fortunate to see many sides of credit unions worldwide and have kept my ear to the ground in learning to appreciate this beautiful mosaic," he said. "I am now better equipped to appreciate the plurality of many cultures and realize that we all gain strength from the common denominator that is the credit union philosophy."
Edwards also says he is confident that when he hands the office to his successor at the Barcelona conference, July 26-29, WOCCU will continue gaining speed in its service to credit unions and their members worldwide.
"I know my successor will continue to build on the strengths that were already present when I arrived, and I counsel him to listen closely. The humility of serving in high office will enable him and WOCCU to succeed," he concluded.
courtesy of cuna.org
However, credit unions can gain even greater influence by speaking as a single global body, supporting credit unions in developing countries and increasing the movement's influence worldwide, he added.
"Credit unions are engines of social and economic development, and too many governments have missed the value of their influence," said Edwards, a St. Kitts and Nevis native whose two-year term as WOCCU chair concludes in July at WOCCU's World Credit Union Conference in Barcelona, Spain. "Credit unions everywhere need to recognize that we exist as a global movement, and we need to speak in one voice."
Much of credit unions' strength is based on their financial transparency, not-for-profit cooperative natures and focus on member service, aspects that set them apart from many for-profit financial institutions. Their emphasis on education helps financially strengthen not only the credit unions, but also the members they serve, Edwards said.
In the end, he said credit unions' "people helping people" philosophy enables them to grow the movement in developing countries and hone individual members' and their own capabilities to weather economic storms like the global financial crisis.
"We need to invest more, not only in educating ourselves but also our members, correcting their assumptions about easy credit and refocusing them on increased savings and safe investments," Edwards added. "The more members know about managing their own funds, the easier it will be for them to keep their credit unions safe, accountable and honest."
During Edwards' tenure as chair, WOCCU expanded its membership to include 40 systems or institutions representing 69 countries. It also increased its influence with legislative and regulatory bodies, including the Basel Committee on Banking Supervision, International Accounting Standards Board, European Union, Group of 20 (G-20) Nations and others.
WOCCU issued a set of International Consumer Protection Principles to set member service standards for credit unions worldwide last year, and WOCCU's technical development efforts have employed new technology to reach the rural poor in Mexico, a program it hopes to expand to other countries later this year.
"I have been very fortunate to see many sides of credit unions worldwide and have kept my ear to the ground in learning to appreciate this beautiful mosaic," he said. "I am now better equipped to appreciate the plurality of many cultures and realize that we all gain strength from the common denominator that is the credit union philosophy."
Edwards also says he is confident that when he hands the office to his successor at the Barcelona conference, July 26-29, WOCCU will continue gaining speed in its service to credit unions and their members worldwide.
"I know my successor will continue to build on the strengths that were already present when I arrived, and I counsel him to listen closely. The humility of serving in high office will enable him and WOCCU to succeed," he concluded.
courtesy of cuna.org
Tuesday, June 9, 2009
CU auto loan incentives mean record May sales
LANSING, Mich. (6/9/09)--A record monthly total of more than 38,000 General Motors (GM) and Chrysler vehicles were sold in May through credit unions' "Invest in America" program, bringing its total to 140,000 new vehicle sales since January. The program is on pace to sell 300,000 vehicles this year.
"Invest in America" is credit unions' auto loan discount program with auto manufacturers General Motors Corp. (GM) and Chrysler Corp. The program started in December with a four-state pilot program for GM and a 12-state pilot for Chrysler.
About 80% of the program's May sales were financed through a credit union, David Adams, CEO of CUCorp, told a teleconference Monday. CUCorp is a marketing company based in Livonia, Mich., and wholly owned subsidiary of the Michigan Credit Union League.
During the first four months of the program--prior to May--average monthly sales were 25,000 vehicles, Adams added.
About 22% of the sales were from members who previously owned an import, and now--through the program--have decided to buy from U.S-based automotive companies, according to GM research data of 1,500 credit unions members who participated in the program in April, Adams told the teleconference. Also, 37% who are in the program had previously owned a vehicle other than a GM product.
The rise in credit union members' auto purchases comes at a time when GM and Chrysler are reinventing themselves through accelerated bankruptcy restructuring efforts, CUCorp said. The credit union sector growth suggests that consumers are buying GM and Chrysler brands despite a feared negative stigma associated with bankruptcy.
"Credit union members are demonstrating that they like the quality and value associated with domestic auto brands," Adams said. "GM and Chrysler are appealing to a broad demographic of credit union members who believe in supporting American companies and their products.
"This support is despite the automakers' challenges, not because of them," he added. "Warranties backed by the federal government, rich incentives, credit union member discounts and the availability of affordable credit are contributing to this positive trend. This isn't a sympathy vote. It's a return to quality and value by people who want to support 'Made in America' products."
About 79% of respondents said the program strengthened their trust in credit unions, according to the GM research of the program's April sales, Adams told the teleconference.
More than 1,700 credit unions, representing about 40 million credit union members nationwide are participating in "Invest in America," Adams added.
courtesy of cuna.org
"Invest in America" is credit unions' auto loan discount program with auto manufacturers General Motors Corp. (GM) and Chrysler Corp. The program started in December with a four-state pilot program for GM and a 12-state pilot for Chrysler.
About 80% of the program's May sales were financed through a credit union, David Adams, CEO of CUCorp, told a teleconference Monday. CUCorp is a marketing company based in Livonia, Mich., and wholly owned subsidiary of the Michigan Credit Union League.
During the first four months of the program--prior to May--average monthly sales were 25,000 vehicles, Adams added.
About 22% of the sales were from members who previously owned an import, and now--through the program--have decided to buy from U.S-based automotive companies, according to GM research data of 1,500 credit unions members who participated in the program in April, Adams told the teleconference. Also, 37% who are in the program had previously owned a vehicle other than a GM product.
The rise in credit union members' auto purchases comes at a time when GM and Chrysler are reinventing themselves through accelerated bankruptcy restructuring efforts, CUCorp said. The credit union sector growth suggests that consumers are buying GM and Chrysler brands despite a feared negative stigma associated with bankruptcy.
"Credit union members are demonstrating that they like the quality and value associated with domestic auto brands," Adams said. "GM and Chrysler are appealing to a broad demographic of credit union members who believe in supporting American companies and their products.
"This support is despite the automakers' challenges, not because of them," he added. "Warranties backed by the federal government, rich incentives, credit union member discounts and the availability of affordable credit are contributing to this positive trend. This isn't a sympathy vote. It's a return to quality and value by people who want to support 'Made in America' products."
About 79% of respondents said the program strengthened their trust in credit unions, according to the GM research of the program's April sales, Adams told the teleconference.
More than 1,700 credit unions, representing about 40 million credit union members nationwide are participating in "Invest in America," Adams added.
courtesy of cuna.org
ID thefts with victims' names on cards rise
PLEASANTON, Calif. (6/9/09)--The number of identity thefts where fraudsters obtained credit cards using victims' names rose during 2008, according to Javelin Strategy and Research.
Javelin attributed the increase to a credit card loan application process that requires less verified information and is easier than other types of loan applications. Also, credit cards provide the most financial gain for thieves, who often don't get caught (CardLine June 8).
The results, published by the Pleasanton, Calif.-based firm last week, are based on a survey conducted by the firm of 4,784 U.S. consumers last year.
Of those responding, 487 said they had been victims of identity theft. Of the identity theft victims, 146 indicated that a variety of fraudulent new accounts had been opened using their name.
Among the new-account fraud victims, one-third said criminals had opened new credit card accounts in their name, up from 26% from the previous year's survey.
Other findings:
Twenty-six percent of the victims said fraudsters opened new store-branded credit cards in their names, down from 29% in 2007.
Fifteen percent reported other types of fraudulent loans were in their names, down from 21%.
Resource Links
CUNA Identity Theft Resources CUNA CPF Fraud and Security materials Intersections Inc./CUNA Strategic Service
courtesy of cuna.org
Javelin attributed the increase to a credit card loan application process that requires less verified information and is easier than other types of loan applications. Also, credit cards provide the most financial gain for thieves, who often don't get caught (CardLine June 8).
The results, published by the Pleasanton, Calif.-based firm last week, are based on a survey conducted by the firm of 4,784 U.S. consumers last year.
Of those responding, 487 said they had been victims of identity theft. Of the identity theft victims, 146 indicated that a variety of fraudulent new accounts had been opened using their name.
Among the new-account fraud victims, one-third said criminals had opened new credit card accounts in their name, up from 26% from the previous year's survey.
Other findings:
Twenty-six percent of the victims said fraudsters opened new store-branded credit cards in their names, down from 29% in 2007.
Fifteen percent reported other types of fraudulent loans were in their names, down from 21%.
Resource Links
CUNA Identity Theft Resources CUNA CPF Fraud and Security materials Intersections Inc./CUNA Strategic Service
courtesy of cuna.org
Monday, June 8, 2009
Energy expert shares summer road-trip tips
WASHINGTON (6/5/09)--Planning a summer road trip? This week's H&FF Radio show lineup of guests includes an energy expert with timely vacation tips to boost your fuel efficiency—just as gasoline prices are starting to soar again.
Home & Family Finance airs Sundays at 3 p.m. EDT 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:
"Fuel Efficiency Tips for Your Summer Road Trip," with Kateri Callahan, president, Alliance to Save Energy, Washington, D.C.;
"Making the Golden Years Golden: Sources of Information to Guide You In Making the Right Decisions for Living Better, Healthier, Independently, and Stress Free," with Dr. Eva Mor, epidemiologist and specialist in gerontology and health-care management, New York;
"Recession Puts You at Increased Risk of Being Duped by Pyramid/Ponzi Schemes," with Sally Greenberg, executive director, National Consumers League, Washington, D.C.; and
Your Questions Answered: Roof-top luggage carriers and gas mileage; income tax and your 401(k) contributions; and Fannie or Freddie--do they hold your mortgage?
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 (WesCorp) and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve our country worldwide.
For more information, read "How You Drive = What You Spend on Gas," and listen to "Investment Scams Targeting Baby Boomers' Retirement Savings" in Home & Family Finance Resource Center.
courtesy of cuna.org
Home & Family Finance airs Sundays at 3 p.m. EDT 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:
"Fuel Efficiency Tips for Your Summer Road Trip," with Kateri Callahan, president, Alliance to Save Energy, Washington, D.C.;
"Making the Golden Years Golden: Sources of Information to Guide You In Making the Right Decisions for Living Better, Healthier, Independently, and Stress Free," with Dr. Eva Mor, epidemiologist and specialist in gerontology and health-care management, New York;
"Recession Puts You at Increased Risk of Being Duped by Pyramid/Ponzi Schemes," with Sally Greenberg, executive director, National Consumers League, Washington, D.C.; and
Your Questions Answered: Roof-top luggage carriers and gas mileage; income tax and your 401(k) contributions; and Fannie or Freddie--do they hold your mortgage?
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 (WesCorp) and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve our country worldwide.
For more information, read "How You Drive = What You Spend on Gas," and listen to "Investment Scams Targeting Baby Boomers' Retirement Savings" in Home & Family Finance Resource Center.
courtesy of cuna.org
Chatzky chats about CUs on the 'Today Show'
NEW YORK (6/5/09)--Consumers looking to minimize bank fees should consider credit unions as an alternative to banks, Jean Chatzky, "Today Show" financial editor, told viewers Thursday.
Chatzky mentioned that banks used to have 250 different fees that they charged consumers, and that many fees are coming back because banks are looking to boost their revenues. Some banks don't even allow customers to opt out of overdraft fees, she added.
When Matt Lauer, the "Today Show" host, asked how consumers can get around some of these fees, Chatzky mentioned credit unions.
"Consider banking with a small community bank or credit unions because fees at these institutions may be a little bit lower," she said.
That tip also was listed on a chart displayed on camera. The Credit Union National Association supplied comparisons of bank and credit union fees to one of Chatzky's researchers for the segment.
courtesy of cuna.org
Study: Expect sustained debit transaction growth
HOUSTON (6/5/09)--Credit unions can expect a sustained debit transaction growth despite the recession, according to a new study that identifies several positive trends for credit union and other issuers of debit cards.
The 2009 Debit Issuer Study, commissioned by PULSE, also found that the use of personal identification number (PIN) debit has increased, while fraud loss rates for debit transactions has declined (BUSINESS WIRE June 4).
Debit issuers surveyed saw an 8% debit transaction growth during the second half of 2008. That growth includes 15% growth in PIN debit transactions and 4% growth in signature debit. Those surveyed predicted growth in 2009 at 7% for each of the PIN and signature debit transactions.
"Debit card use is expected to continue to grow as the economy bottoms out and begins to recover, because consumers use their debit cards for a large portion of necessary everyday expenses," said Cindy Ballard, PULSE executive vice president.
More than one-fourth (27%) of all debit transactions last year were for less than $10. "In most cases, these transactions are replacing cash, highlighting a clear consumer preference for electronic payments," Ballard said.
Penetration--the percentage of eligible accountholders who have a debit card--remained flat--at 73%. Using an expanded definition of "active" debit cards, the study found the number of issued cards used actively was 66%.
PIN debit accounted for 35% of debit transactions in 2008--up from 34.2% in 2007. The average amount debited was $42 for PIN debits and $37 for signature debits. Both figures declined by roughly $1 from the year before. Active debit cardholders made on average 17.3 point-of-sale transactions per month, compared with 16.6 transactions a month in 2007.
Debit card fraud losses at the point of use declined in all categories. PIN losses (in dollars per card) fell to $0.15 from $0.19. ATM losses declined to $0.56 per card, from $0.61. Signature card losses dropped to $1.81 from $1.92. Although losses for all three usage points declined year-over-year, the survey recorded an increase in share for the ATM losses, to 38% of total debit fraud losses last year. That is up from 25% in 2007.
Other findings:
Active debit cardholders averaged three ATM transactions a month, down from 3.4 in the previous survey;
More than half (53%) of issuers participate in a surcharge-free ATM network, down from 56% in 2007. And 43% offer ATM surcharge reimbursements to at least some cardholders.
Bill payments represented 10% of signature debit transactions, compared with 7% in 2007.
The percentage of debit card issuers offering debit rewards rose two percentage points to 53% this year.
Roughly 37% of debit card issuers offer mobile banking, compared with 15% in 2008, and 38% said they plan to introduce it soon, up from 28% last year.
courtesy of cuna.org
The 2009 Debit Issuer Study, commissioned by PULSE, also found that the use of personal identification number (PIN) debit has increased, while fraud loss rates for debit transactions has declined (BUSINESS WIRE June 4).
Debit issuers surveyed saw an 8% debit transaction growth during the second half of 2008. That growth includes 15% growth in PIN debit transactions and 4% growth in signature debit. Those surveyed predicted growth in 2009 at 7% for each of the PIN and signature debit transactions.
"Debit card use is expected to continue to grow as the economy bottoms out and begins to recover, because consumers use their debit cards for a large portion of necessary everyday expenses," said Cindy Ballard, PULSE executive vice president.
More than one-fourth (27%) of all debit transactions last year were for less than $10. "In most cases, these transactions are replacing cash, highlighting a clear consumer preference for electronic payments," Ballard said.
Penetration--the percentage of eligible accountholders who have a debit card--remained flat--at 73%. Using an expanded definition of "active" debit cards, the study found the number of issued cards used actively was 66%.
PIN debit accounted for 35% of debit transactions in 2008--up from 34.2% in 2007. The average amount debited was $42 for PIN debits and $37 for signature debits. Both figures declined by roughly $1 from the year before. Active debit cardholders made on average 17.3 point-of-sale transactions per month, compared with 16.6 transactions a month in 2007.
Debit card fraud losses at the point of use declined in all categories. PIN losses (in dollars per card) fell to $0.15 from $0.19. ATM losses declined to $0.56 per card, from $0.61. Signature card losses dropped to $1.81 from $1.92. Although losses for all three usage points declined year-over-year, the survey recorded an increase in share for the ATM losses, to 38% of total debit fraud losses last year. That is up from 25% in 2007.
Other findings:
Active debit cardholders averaged three ATM transactions a month, down from 3.4 in the previous survey;
More than half (53%) of issuers participate in a surcharge-free ATM network, down from 56% in 2007. And 43% offer ATM surcharge reimbursements to at least some cardholders.
Bill payments represented 10% of signature debit transactions, compared with 7% in 2007.
The percentage of debit card issuers offering debit rewards rose two percentage points to 53% this year.
Roughly 37% of debit card issuers offer mobile banking, compared with 15% in 2008, and 38% said they plan to introduce it soon, up from 28% last year.
courtesy of cuna.org
Conyers bill would force interchange negotiations
WASHINGTON (6/5/09)--Interchange fees could again be a topic of debate on Capitol Hill after Reps. John Conyers, Jr. (D-Mich.) and Bill Shuster (R-Pa.) on Thursday introduced H.R. 2695, the "Credit Card Fair Fee Act of 2009."
The bill would allow merchants to negotiate credit card transaction fees with financial institutions via an antitrust exemption.
Credit unions regulated by the National Credit Union Administration (NCUA) and other financial institutions with less than $1 billion in total assets would be exempted from the terms of the bill. Financial institutions also would not be bound by the terms of outside agreements that they had no part in negotiating.
However, the Credit Union National Association (CUNA) still strongly opposes this bill and disputes proponents arguments that the bill would benefit consumers.
John Magill, senior vice president of legislative affairs at CUNA, said Thursday, "The fact is that the only group that stands to benefit from this legislation is the merchants, and the large merchants at that. "The payment system is working, and the evidence is that consumers can go into most places of business and use a plastic card to pay for their transaction, if they so choose.
"Further proof that the payment system is competitive is that consumers have so many card choices, and merchants have so many credit unions and banks to choose from for acquiring services," Magill said. He added, "This legislation is a solution in search of a problem." Similar legislation, H.R. 5546, met bipartisan opposition last year, yet narrowly passed the House Judiciary Committee by a 19-16 vote. The bill never received a full vote in Congress.
H.R. 2695 is expected to be referred to the House Judiciary Committee soon.
While the recently enacted Credit Card Accountability, Responsibility and Disclosure Act of 2009 did not mandate any changes in interchange fees, it did direct the Government Accountability Office to complete a study on the issue. That study should be completed within six months.
courtesy of cuna.org
The bill would allow merchants to negotiate credit card transaction fees with financial institutions via an antitrust exemption.
Credit unions regulated by the National Credit Union Administration (NCUA) and other financial institutions with less than $1 billion in total assets would be exempted from the terms of the bill. Financial institutions also would not be bound by the terms of outside agreements that they had no part in negotiating.
However, the Credit Union National Association (CUNA) still strongly opposes this bill and disputes proponents arguments that the bill would benefit consumers.
John Magill, senior vice president of legislative affairs at CUNA, said Thursday, "The fact is that the only group that stands to benefit from this legislation is the merchants, and the large merchants at that. "The payment system is working, and the evidence is that consumers can go into most places of business and use a plastic card to pay for their transaction, if they so choose.
"Further proof that the payment system is competitive is that consumers have so many card choices, and merchants have so many credit unions and banks to choose from for acquiring services," Magill said. He added, "This legislation is a solution in search of a problem." Similar legislation, H.R. 5546, met bipartisan opposition last year, yet narrowly passed the House Judiciary Committee by a 19-16 vote. The bill never received a full vote in Congress.
H.R. 2695 is expected to be referred to the House Judiciary Committee soon.
While the recently enacted Credit Card Accountability, Responsibility and Disclosure Act of 2009 did not mandate any changes in interchange fees, it did direct the Government Accountability Office to complete a study on the issue. That study should be completed within six months.
courtesy of cuna.org
Thursday, June 4, 2009
Shared branching saves member's weekend getaway
HARRISBURG, Pa. (6/4/09)--A few days after a Danville, Pa.-based credit union joined a shared branching network, a member put the new service to the test.
Service lst FCU joined the CU Service Center network on March 9. On Friday, March 13, a member in a panic called the credit union from Vermont, according to the Pennsylvania Credit Union Association (Life is a Highway June 3).
The member and his wife were on vacation. Just after arriving at their destination, he reached into his pocket and discovered he forgot to deposit his paycheck. He hoped the credit union could offer options to make the funds available for their weekend getaway.
The credit union representative asked him for the ZIP Code of his location and found a CU Service Center about 10 miles from where the couple were lodged.
About 30 minutes later, the member called again to say he had just visited the location and thanked the credit union for providing the service.
Service lst FCU has more than $136.1 million in assets.
courtesy of cuna.org
Service lst FCU joined the CU Service Center network on March 9. On Friday, March 13, a member in a panic called the credit union from Vermont, according to the Pennsylvania Credit Union Association (Life is a Highway June 3).
The member and his wife were on vacation. Just after arriving at their destination, he reached into his pocket and discovered he forgot to deposit his paycheck. He hoped the credit union could offer options to make the funds available for their weekend getaway.
The credit union representative asked him for the ZIP Code of his location and found a CU Service Center about 10 miles from where the couple were lodged.
About 30 minutes later, the member called again to say he had just visited the location and thanked the credit union for providing the service.
Service lst FCU has more than $136.1 million in assets.
courtesy of cuna.org
Survey: Women at higher risk for ID theft
NEW YORK (6/3/09)--Women are more likely to be a victim of identity theft--and lose more money--than men, according to national survey results released by Norwalk, Conn.-based Affinion Security Center (eMarketer.com May 19).
The good news is that women are more likely to change behavior after the experience.
Twenty-eight percent of women surveyed had their identity stolen, compared with 21% of men. And 17% of women surveyed lost $1,000 or more that they never recovered, compared with only 10% of men reporting losses that high.
Survey respondents were asked if they changed behavior to protect themselves. Responses revealed that women are more likely to take aggressive action--such as subscribing to a credit-monitoring service, traveling with limited personal information and shredding documents before disposing of them--to avoid becoming a victim twice.
An identity fraud survey report released in February by Javelin Strategy & Research revealed that fraud attacks involving women occurred most often in person, such as in restaurants and stores, rather than online.
Lin Standke, Credit Union National Association's manager of youth programs and a victim of identify fraud, offers these suggestions for protection:
Zip it up. The No. 1 method for stealing your personal information is through lost or stolen wallets, so keep your plastic safe. Use a purse with a zipper rather than an open bag. Don't hang your purse on the back of a chair at a restaurant. Instead, keep it between your feet or on your lap.
Be consistent. Keep your plastic in the same place and put it back there every time you use it. That way you'll notice immediately if a card is missing. Better yet, carry only the card you plan to use and your driver's license.
Keep it in sight. Ask to see a manager if a store employee steps into a back room to swipe your credit card when there is a machine at the cash register. This is not a typical procedure (except in restaurants), and the clerk may be copying your information.
Take online precautions. Keep your virus protection programs up to date, install a firewall, and don't click on links within e-mail messages.
Check account activity frequently—online. Most credit and debit cards have online access so you can review your purchases. If you find a charge you didn't make, report it immediately.
Lock it up. Keep personal information such as account numbers, passwords, and Social Security numbers in a safe, locked place at home.
For more information, read, "Identity Theft: Getting Back to Square One" in Home & Family Finance Resource Center.
courtesy of cuna.org
The good news is that women are more likely to change behavior after the experience.
Twenty-eight percent of women surveyed had their identity stolen, compared with 21% of men. And 17% of women surveyed lost $1,000 or more that they never recovered, compared with only 10% of men reporting losses that high.
Survey respondents were asked if they changed behavior to protect themselves. Responses revealed that women are more likely to take aggressive action--such as subscribing to a credit-monitoring service, traveling with limited personal information and shredding documents before disposing of them--to avoid becoming a victim twice.
An identity fraud survey report released in February by Javelin Strategy & Research revealed that fraud attacks involving women occurred most often in person, such as in restaurants and stores, rather than online.
Lin Standke, Credit Union National Association's manager of youth programs and a victim of identify fraud, offers these suggestions for protection:
Zip it up. The No. 1 method for stealing your personal information is through lost or stolen wallets, so keep your plastic safe. Use a purse with a zipper rather than an open bag. Don't hang your purse on the back of a chair at a restaurant. Instead, keep it between your feet or on your lap.
Be consistent. Keep your plastic in the same place and put it back there every time you use it. That way you'll notice immediately if a card is missing. Better yet, carry only the card you plan to use and your driver's license.
Keep it in sight. Ask to see a manager if a store employee steps into a back room to swipe your credit card when there is a machine at the cash register. This is not a typical procedure (except in restaurants), and the clerk may be copying your information.
Take online precautions. Keep your virus protection programs up to date, install a firewall, and don't click on links within e-mail messages.
Check account activity frequently—online. Most credit and debit cards have online access so you can review your purchases. If you find a charge you didn't make, report it immediately.
Lock it up. Keep personal information such as account numbers, passwords, and Social Security numbers in a safe, locked place at home.
For more information, read, "Identity Theft: Getting Back to Square One" in Home & Family Finance Resource Center.
courtesy of cuna.org
American Banker: CUs are 'the mouse that roared'
MADISON, Wis. (6/3/09)--Credit unions' market share for the home loan origination market has grown to the extent that they could be called the industry's "mouse that roared," American Banker said Tuesday.
With the reputation of large financial institutions hurt by aggressive loans that backfired during the real estate market's boom, credit unions have gained more members, the publication said.
Also, credit unions tend to have a better reputation than many lenders in the residential real estate finance business, and--for the most part--follow low-risk strategies, American Banker said.
"People are looking for people they can trust to originate a mortgage," Les Parker, president of Parker & Co., a mortgage advisory firm with clients that include credit unions, told the publication.
Credit unions have some constraints on the their home loan growth such as regulatory and business culture changes they would need to implement to become bigger player in the mortgage business, and because of the nature of their membership paradigm, American Banker said.
American Banker is a banking industry publication.
courtesy of cuna.org
With the reputation of large financial institutions hurt by aggressive loans that backfired during the real estate market's boom, credit unions have gained more members, the publication said.
Also, credit unions tend to have a better reputation than many lenders in the residential real estate finance business, and--for the most part--follow low-risk strategies, American Banker said.
"People are looking for people they can trust to originate a mortgage," Les Parker, president of Parker & Co., a mortgage advisory firm with clients that include credit unions, told the publication.
Credit unions have some constraints on the their home loan growth such as regulatory and business culture changes they would need to implement to become bigger player in the mortgage business, and because of the nature of their membership paradigm, American Banker said.
American Banker is a banking industry publication.
courtesy of cuna.org
Clinton notes CUs in eulogy of ex-CUNA spokeswoman
WASHINGTON (6/3/09)--Former President Bill Clinton talked about credit unions and Brooke Shearer's passion for them during a memorial service Saturday for Shearer, a former spokesperson for the Credit Union National Association (CUNA).
Shearer, 58, who was communications director for CUNA in Washington during the 1980s, died May 19 at her home of cancer. She had known Bill and Hillary Clinton for 38 years, Clinton said.
Clinton told about calling Shearer a week before she passed away, according to Larry Blanchard, CUNA Mutual Group legislative consultant, who attended the celebration of life service.
Clinton and Shearer discussed the importance of credit unions, he told about 1,000 people at the service. She began the conversation by asking how the economy was doing, Clinton said.
Clinton assured her President Barack Obama's administration had made a good start and things were improving. Shearer interrupted him and told him that they needed "to help credit unions get through that mess. We've got to get that fixed."
Shearer remained enthusiastic about credit unions and during her final months sent letters to Obama's transition team and other policymakers about the positive impact credit unions had in helping members weather the recession.
Other speakers at the service included Hillary Clinton; Supreme Court of the U.S. Associate Justice Stephen G. Breyer and his wife Joanna; Shearer's sons Devin and Adrian Talbott, and her daughter-in-law Lauren Talbott.
Shearer served as Hillary Clinton's personal aide during Bill Clinton's 1992 presidential campaign. Shearer and her husband, Strobe Talbott, held positions in the Clinton administration. Talbott now heads the Brookings Institution research and policy center. Shearer was founding director of the Yale World Fellows program and was on the board of the International Center for Research on Women.
courtesy of cuna.org
Shearer, 58, who was communications director for CUNA in Washington during the 1980s, died May 19 at her home of cancer. She had known Bill and Hillary Clinton for 38 years, Clinton said.
Clinton told about calling Shearer a week before she passed away, according to Larry Blanchard, CUNA Mutual Group legislative consultant, who attended the celebration of life service.
Clinton and Shearer discussed the importance of credit unions, he told about 1,000 people at the service. She began the conversation by asking how the economy was doing, Clinton said.
Clinton assured her President Barack Obama's administration had made a good start and things were improving. Shearer interrupted him and told him that they needed "to help credit unions get through that mess. We've got to get that fixed."
Shearer remained enthusiastic about credit unions and during her final months sent letters to Obama's transition team and other policymakers about the positive impact credit unions had in helping members weather the recession.
Other speakers at the service included Hillary Clinton; Supreme Court of the U.S. Associate Justice Stephen G. Breyer and his wife Joanna; Shearer's sons Devin and Adrian Talbott, and her daughter-in-law Lauren Talbott.
Shearer served as Hillary Clinton's personal aide during Bill Clinton's 1992 presidential campaign. Shearer and her husband, Strobe Talbott, held positions in the Clinton administration. Talbott now heads the Brookings Institution research and policy center. Shearer was founding director of the Yale World Fellows program and was on the board of the International Center for Research on Women.
courtesy of cuna.org
Tuesday, June 2, 2009
Idaho league names outstanding pro, volunteer
BOISE, Idaho (6/2/09)--The Idaho Credit Union League named recipients for its Outstanding Professional of the Year and Outstanding Volunteer of the Year awards.
The awards were presented during the league's 73rd annual meeting.
Val Guenther, CEO of Lewis Clark CU in Lewiston, received the Professional of the Year award. She has worked in the Idaho credit union movement for more than 30 years. Guenther is an advocate for youth financial literacy; serves as vice chair of the board of League Services, Inc., the for-profit arm of the Idaho league; chairs the league's scholarship committee; and serves on its Credit Unions for Kids Committee.
Ron Anderson, chairman of Kamiah (Idaho) Community CU, received the Outstanding Volunteer award. He chairs the credit union's board of directors and has been involved with the league's Hike the Hill events in Washington, D.C. He also has been involved with community events, such as volunteering to repair the city's American Legion building and contributing to Credit Unions for Kids.
AARP: 'Skip the bank, look into CUs'
NEW YORK (6/2/09)--An article in AARP Bulletin Today discusses seven ways to beat the bank on fees. Its No. 7 suggestion: "Skip the bank, look into credit unions."
"According to some credit union fans, the best way to beat the banks is not to use them," said the article (May 20).
"When I hear my friends complaining about bank fees and service charges, I tell them to look into credit unions," Maureen Sherman of West Nyack, N.Y., told the publication.
Sherman says she doesn't worry "about what new fees my credit union is tacking on to my account because, as a member-owner, not-for-profit organization, I know they have my best interest at heart."
The article notes that readers will find credit unions offering the same products and services as banks but with no or lower fees than other financial institutions. It also discusses the member-owned structure of credit unions.
To review the article and its seven tips for avoiding fees, use the resource link.
courtesy of cuna.org
"According to some credit union fans, the best way to beat the banks is not to use them," said the article (May 20).
"When I hear my friends complaining about bank fees and service charges, I tell them to look into credit unions," Maureen Sherman of West Nyack, N.Y., told the publication.
Sherman says she doesn't worry "about what new fees my credit union is tacking on to my account because, as a member-owner, not-for-profit organization, I know they have my best interest at heart."
The article notes that readers will find credit unions offering the same products and services as banks but with no or lower fees than other financial institutions. It also discusses the member-owned structure of credit unions.
To review the article and its seven tips for avoiding fees, use the resource link.
courtesy of cuna.org
CU deposits and capital rise, earnings problematic
MADISON, Wis. (6/2/09)--Credit unions are seeing a swell in deposit growth, but may find it harder to generate earnings over the next couple of years, according to a Credit Union National Association (CUNA) economist.
The credit union movement's overall capital-to-asset ratio for April is at 9.6%, and the total dollar amount of capital is at $83 billion, reported the CUNA monthly sample of credit unions.
After falling for three consecutive months, credit union capital levels rose 0.1% in April, reaching $83.34 billion," Steve Rick, CUNA senior economist, told News Now. "Capital levels are now down 8.3% from the peak of $90.84 billion reached last November.
"Credit unions' return on assets is expected to fall to less than 0.20% in 2009--excluding corporate stabilization costs--as rising loan loss provisions eat up most pre-provision income," he added. "Over the next couple of years, all financial institutions are going to find it harder to generate earnings."
Credit union asset balances rose 0.5% in April and 4.7% year-to-date, Rick said. With assets growing faster than capital, the capital-to-asset ratio fell to 9.56% in April from 10.8% at the end of 2008.
"With this ratio expected to fall over the next two years, credit unions are now operating with a heightened awareness of risk, especially the systemic risks facing an economy going through the worst recession since the Great Depression," he added.
Credit union loans outstanding increased 0.2% in April 2009 and 0.3% during the first four months of 2009, down from a 1.2% increase during the same period of 2008.
Leading loan growth was other loans, rising 1.8%, while credit card loans and home equity loans grew 1.1% each. Used-auto loans (0.8%) and adjustable-rate mortgages (0.7%) also increased this month. Declining during April were other mortgages (-1.2%) and new-auto loans (-1.1%).
"Relative to other financial institutions, credit unions maintain more consistent credit standards throughout business cycles," Rick said. "This cost credit unions some loans in good times, but is now increasing their credit market share in the current economic downturn.
"Specifically, credit unions are making significant gains in the mortgage market," he continued. "Fixed-rate mortgage loans are up 10.5% from April 2008, while home equity loan balances are up 13%. Credit unions need to guard against a rising adverse selection problem, however, as high-risk borrowers who are denied credit at banks turn to credit unions for loans."
Credit union savings balances rose 0.7% in April, but grew 6.4% during the first four months of 2009. Individual retirement accounts grew the fastest with a 3.6% increase, followed by money market accounts (1.4%), share drafts (1%) and regular shares (1%). One-year certificates declined 0.6% during April.
"As U.S. households change their financial behavior by deleveraging their balance sheets, credit unions are seeing a surge in deposit growth," Rick explained. "Savings balances rose 0.7% in April and 6.4% year-to-date, the fastest pace since the 2001 recession. Credit unions should not minimize the scale of the changes sweeping over the financial services industry and should begin planning for the 'new normal' business environment."
The loan-to-savings ratio remains close to 79% during the last three months. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%.
Credit union 60-plus-day delinquencies grew to 1.6% in April 2009 from 1.5% in March.
courtesy of cuna.org
The credit union movement's overall capital-to-asset ratio for April is at 9.6%, and the total dollar amount of capital is at $83 billion, reported the CUNA monthly sample of credit unions.
After falling for three consecutive months, credit union capital levels rose 0.1% in April, reaching $83.34 billion," Steve Rick, CUNA senior economist, told News Now. "Capital levels are now down 8.3% from the peak of $90.84 billion reached last November.
"Credit unions' return on assets is expected to fall to less than 0.20% in 2009--excluding corporate stabilization costs--as rising loan loss provisions eat up most pre-provision income," he added. "Over the next couple of years, all financial institutions are going to find it harder to generate earnings."
Credit union asset balances rose 0.5% in April and 4.7% year-to-date, Rick said. With assets growing faster than capital, the capital-to-asset ratio fell to 9.56% in April from 10.8% at the end of 2008.
"With this ratio expected to fall over the next two years, credit unions are now operating with a heightened awareness of risk, especially the systemic risks facing an economy going through the worst recession since the Great Depression," he added.
Credit union loans outstanding increased 0.2% in April 2009 and 0.3% during the first four months of 2009, down from a 1.2% increase during the same period of 2008.
Leading loan growth was other loans, rising 1.8%, while credit card loans and home equity loans grew 1.1% each. Used-auto loans (0.8%) and adjustable-rate mortgages (0.7%) also increased this month. Declining during April were other mortgages (-1.2%) and new-auto loans (-1.1%).
"Relative to other financial institutions, credit unions maintain more consistent credit standards throughout business cycles," Rick said. "This cost credit unions some loans in good times, but is now increasing their credit market share in the current economic downturn.
"Specifically, credit unions are making significant gains in the mortgage market," he continued. "Fixed-rate mortgage loans are up 10.5% from April 2008, while home equity loan balances are up 13%. Credit unions need to guard against a rising adverse selection problem, however, as high-risk borrowers who are denied credit at banks turn to credit unions for loans."
Credit union savings balances rose 0.7% in April, but grew 6.4% during the first four months of 2009. Individual retirement accounts grew the fastest with a 3.6% increase, followed by money market accounts (1.4%), share drafts (1%) and regular shares (1%). One-year certificates declined 0.6% during April.
"As U.S. households change their financial behavior by deleveraging their balance sheets, credit unions are seeing a surge in deposit growth," Rick explained. "Savings balances rose 0.7% in April and 6.4% year-to-date, the fastest pace since the 2001 recession. Credit unions should not minimize the scale of the changes sweeping over the financial services industry and should begin planning for the 'new normal' business environment."
The loan-to-savings ratio remains close to 79% during the last three months. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%.
Credit union 60-plus-day delinquencies grew to 1.6% in April 2009 from 1.5% in March.
courtesy of cuna.org
Miller v. BoA decision favors financial institutions
WASHINGTON (6/2/09)-- The California Supreme Court Monday backed Bank of America's (BoA) position and ruled that state law permits BoA and other depository institutions in California to cover overdrafts and overdraft fees from Social Security funds and other protected public benefit deposits.
The state supreme court, ruling on an appeal in Miller v. Bank of America, said the practice did not violate the California Unfair Business Practices Act.
Credit unions have been watching this case for years as it has moved through the California court system. The decision affects a broad swath of financial institutions, including California credit unions and credit unions doing business in the state.
The Creidt Union National Association (CUNA), the California CU League, banking trade associations, and the U.S. government filed amicus briefs in the appellate court in support of BoA's position. Many of the same parties, including CUNA, filed an amicus brief with the California Supreme Court.
The implications of the case are important to consumers as well. For instance, CUNA General Counsel Eric Richard said Monday that the ruling helps to assure access to checking accounts for those receiving protected federal benefit funds .
"If a financial institution's ability to recoup losses and fees caused by overdrafts was invalidated because an account was funded in part or fully by protected federal benefit deposits such as Social Security funds , it could have the unfavorable result of making it harder for those consumers to have checking accounts and other services such as ATM cards ," he said.
Throughout the case, BofA had argued that federal law and regulation preempt a California law that prohibits tapping SS money in an account. However, in December 2004 a judge for the Superior Court of San Francisco upheld an over-$1 billion-dollar jury award against BofA for violating state law.
But in November 2006, a California Court of Appeals reversed the lower court's ruling and award, and decided in favor of BofA. The plaintiff, Paul Miller, then filed an appeal with the California Supreme Court.
However, the Supreme Court, as noted, also sided with the bank's position. In its decision, the court declared that the state financial code "expressly excludes overdrafts and bank charges from the statutes definition of debt."
The court concluded: "...Bank of America's practice of recouping overdrafts and charging insufficient funds fees is permissible in light of the Legislature's unequivocal statement in Financial Code section 864 that overdrafts and bank charges are not debts and are therefore not subject to the limitations placed on a bank's right of setoff set forth in that statute. "
In a related story, The Wall Street Journal reported Monday that the U.S. Treasury Department is getting some heat from a bipartisan group of federal lawmakers to close a loophole relating to federal benefits.
Federal law prohibits creditors from taking SS, disability, veterans' and children's survivor benefits to pay a debt. However, the law is silent on how money deposited directly into accounts are financial institutions should be handled.
The article reported that the U.S. Treasury and Social Security Administration, along with banking regulators, drafted rules to close the loophole earlier this year, but they have not progressed beyond the proposal stage.
Members of the Senate Special Committee on Aging, as well as some members of the House, including Financial Services Committee Chairman Barney Frank (D-Mass.), have urged Treasury Secretary Geithner to act on the plan.
courtesy of cuna.org
The state supreme court, ruling on an appeal in Miller v. Bank of America, said the practice did not violate the California Unfair Business Practices Act.
Credit unions have been watching this case for years as it has moved through the California court system. The decision affects a broad swath of financial institutions, including California credit unions and credit unions doing business in the state.
The Creidt Union National Association (CUNA), the California CU League, banking trade associations, and the U.S. government filed amicus briefs in the appellate court in support of BoA's position. Many of the same parties, including CUNA, filed an amicus brief with the California Supreme Court.
The implications of the case are important to consumers as well. For instance, CUNA General Counsel Eric Richard said Monday that the ruling helps to assure access to checking accounts for those receiving protected federal benefit funds .
"If a financial institution's ability to recoup losses and fees caused by overdrafts was invalidated because an account was funded in part or fully by protected federal benefit deposits such as Social Security funds , it could have the unfavorable result of making it harder for those consumers to have checking accounts and other services such as ATM cards ," he said.
Throughout the case, BofA had argued that federal law and regulation preempt a California law that prohibits tapping SS money in an account. However, in December 2004 a judge for the Superior Court of San Francisco upheld an over-$1 billion-dollar jury award against BofA for violating state law.
But in November 2006, a California Court of Appeals reversed the lower court's ruling and award, and decided in favor of BofA. The plaintiff, Paul Miller, then filed an appeal with the California Supreme Court.
However, the Supreme Court, as noted, also sided with the bank's position. In its decision, the court declared that the state financial code "expressly excludes overdrafts and bank charges from the statutes definition of debt."
The court concluded: "...Bank of America's practice of recouping overdrafts and charging insufficient funds fees is permissible in light of the Legislature's unequivocal statement in Financial Code section 864 that overdrafts and bank charges are not debts and are therefore not subject to the limitations placed on a bank's right of setoff set forth in that statute. "
In a related story, The Wall Street Journal reported Monday that the U.S. Treasury Department is getting some heat from a bipartisan group of federal lawmakers to close a loophole relating to federal benefits.
Federal law prohibits creditors from taking SS, disability, veterans' and children's survivor benefits to pay a debt. However, the law is silent on how money deposited directly into accounts are financial institutions should be handled.
The article reported that the U.S. Treasury and Social Security Administration, along with banking regulators, drafted rules to close the loophole earlier this year, but they have not progressed beyond the proposal stage.
Members of the Senate Special Committee on Aging, as well as some members of the House, including Financial Services Committee Chairman Barney Frank (D-Mass.), have urged Treasury Secretary Geithner to act on the plan.
courtesy of cuna.org
Tax credits for 'green' home improvements
MADISON, Wis. (6/1/09)--If you can come up with the cash, make energy-efficient home improvements now to receive savings from both tax credits and lower energy bills (Credit Union National Association's Center for Personal Finance, May 28).
Thanks to recent stimulus package changes, you may be eligible for federal tax credits, which are generally more valuable than tax deductions. A tax deduction lowers your taxable income based on your tax bracket, while a tax credit gives you 100% of the credit back and is not income based.
Here's an example: If you are in the 35% tax bracket, a $1,000 deduction reduces your tax bill by $350, but a $1,000 tax credit reduces it by the full $1,000. Claim the credit on your federal income tax form.
Tax credits are available for 30% of the cost of these energy-efficient home improvements, up to $1,500, through 2010 for existing primary homes only:
Energy-efficient furnace, air conditioner, heat pump, or boiler;
Insulation;
Skylights and storm windows and doors;
Non-solar water heater;
Roofs (metal and asphalt); and
Biomass stoves.
Tax credits are available for up to 30% of the cost of these energy-efficient improvements, with no maximum dollar amount, through 2016 for existing primary homes, new home construction, rentals, and secondary homes:
Geothermal (ground-source) heat pump;
Solar panels;
Solar water heater; and
Small wind energy system.
For a more detailed breakdown of energy-efficient improvements, tax credits and qualifications, visit Alliance to Save Energy at ase.org, the Weatherization Source at weatherizationsource.com and Energy Star at energystar.gov.
courtesy of cuna.org
Thanks to recent stimulus package changes, you may be eligible for federal tax credits, which are generally more valuable than tax deductions. A tax deduction lowers your taxable income based on your tax bracket, while a tax credit gives you 100% of the credit back and is not income based.
Here's an example: If you are in the 35% tax bracket, a $1,000 deduction reduces your tax bill by $350, but a $1,000 tax credit reduces it by the full $1,000. Claim the credit on your federal income tax form.
Tax credits are available for 30% of the cost of these energy-efficient home improvements, up to $1,500, through 2010 for existing primary homes only:
Energy-efficient furnace, air conditioner, heat pump, or boiler;
Insulation;
Skylights and storm windows and doors;
Non-solar water heater;
Roofs (metal and asphalt); and
Biomass stoves.
Tax credits are available for up to 30% of the cost of these energy-efficient improvements, with no maximum dollar amount, through 2016 for existing primary homes, new home construction, rentals, and secondary homes:
Geothermal (ground-source) heat pump;
Solar panels;
Solar water heater; and
Small wind energy system.
For a more detailed breakdown of energy-efficient improvements, tax credits and qualifications, visit Alliance to Save Energy at ase.org, the Weatherization Source at weatherizationsource.com and Energy Star at energystar.gov.
courtesy of cuna.org
CU helps Fort Hood troops moving to Colo.
FORT HOOD, Texas (6/1/09)--Security Service FCU staffers traveled to Fort Hood, Texas, for a weeklong community fair earlier this month to help the U.S. Army's 4th Infantry Division prepare for its relocation to Fort Carson, Colo.
More than 3,000 troops attended the fair. The troops will be reassigned from Texas to Colorado as part of the most recent Base Realignment and Closure (BRAC) Commission action.
To help prepare the soldiers and their families for the move, realtors, school districts, homebuilders and others were invited to help the troops make a smooth transition to their new location . They provided information about the Colorado Springs area, where Fort Carson is located.
Several Security Service employees from its Texas and Colorado operations helped familiarize the soldiers with the credit union, offered information about available services, and assisted attendees with financial questions, including questions about home finance and other products and services.
Security Service has operations in three major Colorado market areas, including 14 service centers with one located on the Fort Carson Army Post. The San Antonio-based credit union--the official credit union for Fort Carson--has a long-term relationship with the post and its substantial military population.
"Our ultimate goal was to help the military men and women make their transition from Fort Hood to Fort Carson more comfortable," said Mike Martinez, senior vice president for SSFCU.
"We want the soldiers affected by the move to know that they can count on us for any financial advice or assistance they may need as they transition from central Texas to southern Colorado. We are just glad we could be on-site to help them."
courtesy of cuna.org
More than 3,000 troops attended the fair. The troops will be reassigned from Texas to Colorado as part of the most recent Base Realignment and Closure (BRAC) Commission action.
To help prepare the soldiers and their families for the move, realtors, school districts, homebuilders and others were invited to help the troops make a smooth transition to their new location . They provided information about the Colorado Springs area, where Fort Carson is located.
Several Security Service employees from its Texas and Colorado operations helped familiarize the soldiers with the credit union, offered information about available services, and assisted attendees with financial questions, including questions about home finance and other products and services.
Security Service has operations in three major Colorado market areas, including 14 service centers with one located on the Fort Carson Army Post. The San Antonio-based credit union--the official credit union for Fort Carson--has a long-term relationship with the post and its substantial military population.
"Our ultimate goal was to help the military men and women make their transition from Fort Hood to Fort Carson more comfortable," said Mike Martinez, senior vice president for SSFCU.
"We want the soldiers affected by the move to know that they can count on us for any financial advice or assistance they may need as they transition from central Texas to southern Colorado. We are just glad we could be on-site to help them."
courtesy of cuna.org
Half of Ireland's CUs may report losses
DUBLIN, Ireland (6/1/09)--As many as half of Ireland's 405 credit unions could report losses this year.
The driving forces behind credit unions heading into the red are losses on investments and a sharp uptick in members becoming delinquent on their loans, analysts said (Irish Independent May 29).
Most of the nation's credit unions have sustained significant losses in bank bonds--known as perpetual bonds--which now are worth a fraction of their original value in the wake of the worldwide banking collapse, analysts added.
Also, the inability of as many as 180 of Ireland's credit unions to pay dividends this year will lead to a "catastrophic" run on members' savings, the Irish League of Credit Unions (ILCU) warned (The Irish Examiner May 29).
Losses at credit unions and the need to bolster cash reserves under new regulations could lead to a crisis, the league said.
Kieron Brennan, ILCU chief executive, asked the nation's Financial Regulator not to introduce strict new reserve ratios in September, which will mandate a statutory reserve of 10% of total assets for the country's 405 credit unions.
The ILCU said the new regulations will lessen credit unions' ability to pay dividends to their 2.2 million members.
courtesy of cuna.org
The driving forces behind credit unions heading into the red are losses on investments and a sharp uptick in members becoming delinquent on their loans, analysts said (Irish Independent May 29).
Most of the nation's credit unions have sustained significant losses in bank bonds--known as perpetual bonds--which now are worth a fraction of their original value in the wake of the worldwide banking collapse, analysts added.
Also, the inability of as many as 180 of Ireland's credit unions to pay dividends this year will lead to a "catastrophic" run on members' savings, the Irish League of Credit Unions (ILCU) warned (The Irish Examiner May 29).
Losses at credit unions and the need to bolster cash reserves under new regulations could lead to a crisis, the league said.
Kieron Brennan, ILCU chief executive, asked the nation's Financial Regulator not to introduce strict new reserve ratios in September, which will mandate a statutory reserve of 10% of total assets for the country's 405 credit unions.
The ILCU said the new regulations will lessen credit unions' ability to pay dividends to their 2.2 million members.
courtesy of cuna.org
Nonprofits are key to improved N.Y. economy
NEW YORK (6/1/09)--In the face of tightening credit and budget cuts, community development financial institutions (CDFIs) continue to lend and provide financial services to their communities--creating jobs, building affordable housing units, and supporting small businesses in urban and rural areas across New York State.
This was the message heard by more than 50 community lending and development organizations at the annual New York Coalition of CDFIs Statewide Conference, May 7 in Albany, N.Y. The conference was organized by the National Federation of Community Development Credit Unions.
More than 100 individuals attended to hear about the financial "state of the state" and to discuss the economic downturn's impact on low- and moderate-income communities. Attendees heard from speakers of state agencies, and experts in the fields of microfinance, homeownership and foreclosure prevention.
New York Gov. David Paterson sent a letter confirming the important role CDFIs play. It said: "New York relies upon diversity within its financial services industries. Community-based institutions have far-reaching effects on our overall economic growth and are recognized for the services they provide to New Yorkers of all income levels. CDFIs in New York continue to lead with vision and fresh ideas that help strengthen local and national economic structures."
Jeffrey Metzler, vice president of Empire State Development Corporation (ESD), the state agency responsible for supporting New York's CDFIs, discussed the expansion of funding for ESD's economic development programs aimed at small businesses, including an additional $2.5 million, or a 170% increase, for the CDFI grant program aimed at small businesses.
While the increase in lending capital for small businesses is welcome, the coalition has sought more substantial support for the full range of CDFIs' activities. The coalition reached a major milestone in 2007 when the New York State CDFI Fund was signed into law. However, not a single state dollar has been directed toward the new fund, the federation said.
"One of the coalition's major goals in 2010 is to ensure that there is a direct allocation for the New York State CDFI Fund in the state budget," said Federation President/CEO Cliff Rosenthal. "CDFIs are experts at leveraging public monies with private funds, and our research has shown that just a $15 million investment from the state would create as much as $150 million in direct investments in our communities. Our hope is that with adequate support, the New York State CDFI Fund will bring a renewed emphasis for economic development of individuals and small businesses, complementing ESD's traditional large-scale economic development projects."
Carol Wayman, legislative director of the Corporation for Enterprise Development in Washington D.C., explained that entrepreneurship and microenterprise are being embraced by President Barack Obama and congressional leaders. CDFIs are recognized as critical to the nation's economic growth and as an integral part of the solution to the country's economic woes, she said.
Also, staff of the U.S. Treasury's CDFI fund announced that President Obama's fiscal year (FY) 2010 budget requests $243.6 million for the CDFI Fund--more than doubles the $107 million appropriated for FY 2009.
Conference organizers said they hope Gov. Paterson will see the need for more funding in coming years.
"Greater support from the state will help position New York CDFIs to access increased federal support, and it is essential that New York State CDFIs be prepared to tap into this important source of funds," said Melanie Stern, federation assistant director of Community Development Investments and a coordinator of the CDFI Coalition. "CDFI investment will help jump-start local economies and go a long way toward helping struggling New Yorkers through the economic recession."
courtesy of cuna.org
This was the message heard by more than 50 community lending and development organizations at the annual New York Coalition of CDFIs Statewide Conference, May 7 in Albany, N.Y. The conference was organized by the National Federation of Community Development Credit Unions.
More than 100 individuals attended to hear about the financial "state of the state" and to discuss the economic downturn's impact on low- and moderate-income communities. Attendees heard from speakers of state agencies, and experts in the fields of microfinance, homeownership and foreclosure prevention.
New York Gov. David Paterson sent a letter confirming the important role CDFIs play. It said: "New York relies upon diversity within its financial services industries. Community-based institutions have far-reaching effects on our overall economic growth and are recognized for the services they provide to New Yorkers of all income levels. CDFIs in New York continue to lead with vision and fresh ideas that help strengthen local and national economic structures."
Jeffrey Metzler, vice president of Empire State Development Corporation (ESD), the state agency responsible for supporting New York's CDFIs, discussed the expansion of funding for ESD's economic development programs aimed at small businesses, including an additional $2.5 million, or a 170% increase, for the CDFI grant program aimed at small businesses.
While the increase in lending capital for small businesses is welcome, the coalition has sought more substantial support for the full range of CDFIs' activities. The coalition reached a major milestone in 2007 when the New York State CDFI Fund was signed into law. However, not a single state dollar has been directed toward the new fund, the federation said.
"One of the coalition's major goals in 2010 is to ensure that there is a direct allocation for the New York State CDFI Fund in the state budget," said Federation President/CEO Cliff Rosenthal. "CDFIs are experts at leveraging public monies with private funds, and our research has shown that just a $15 million investment from the state would create as much as $150 million in direct investments in our communities. Our hope is that with adequate support, the New York State CDFI Fund will bring a renewed emphasis for economic development of individuals and small businesses, complementing ESD's traditional large-scale economic development projects."
Carol Wayman, legislative director of the Corporation for Enterprise Development in Washington D.C., explained that entrepreneurship and microenterprise are being embraced by President Barack Obama and congressional leaders. CDFIs are recognized as critical to the nation's economic growth and as an integral part of the solution to the country's economic woes, she said.
Also, staff of the U.S. Treasury's CDFI fund announced that President Obama's fiscal year (FY) 2010 budget requests $243.6 million for the CDFI Fund--more than doubles the $107 million appropriated for FY 2009.
Conference organizers said they hope Gov. Paterson will see the need for more funding in coming years.
"Greater support from the state will help position New York CDFIs to access increased federal support, and it is essential that New York State CDFIs be prepared to tap into this important source of funds," said Melanie Stern, federation assistant director of Community Development Investments and a coordinator of the CDFI Coalition. "CDFI investment will help jump-start local economies and go a long way toward helping struggling New Yorkers through the economic recession."
courtesy of cuna.org
Banks eyeing checking accounts for fees
NEW YORK (6/1/09)--While credit card rates are under scrutiny in Washington, banks are already looking for other ways to boost their fee income. They are raising fees on checking accounts.
Credit unions might want to monitor this development and market more aggressively their own low rates on checking accounts.
Banks are making it easier for consumers to spend more than they have in their checking accounts, and when consumers do, the banks hit them with steeper punitive fees, according to USA TODAY (May 28).
Also rising: ATM fees, minimum balance requirements for interest checking accounts, and monthly service fees. These fees hit record highs during 2008, according to Bankrate.com. Greg McBride, senior analyst at Bankrate.com, expects these fees to increase even more in 2009.
Several banks have already announced their fee hikes:
Bank of America will raise its monthly fee on some checking accounts and start charging a fee on accounts that remain overdrawn. The reason for the fees: the bank's costs are up and consumers are riskier today. Beginning this month, BofA will raise its monthly account-maintenance fees on its MyAccess checking to $8.95--a $3 increase. It will begin charging a one-time $35 fee if an account remains overdrawn for five business days. The bank has also increased the number of times customers can be hit with overdraft fees per day to 10, or double that of last year.
Wachovia (now Wells Fargo) doubled its fee for transferring funds to cover an overdrawn checking account to $10. It will charge the fee to a credit card rather than taking it from a linked bank account, which means the consumer could pay interest on the fees. A Wachovia spokesman said the fees were increased to make fees the same across multiple accounts.
SunTrust began charging last month a higher fee on basic checking if a customer overdraws multiple times, similar to what banks have done with late fees on credit card accounts. It also raised its overdraft fee on other bank accounts. Even though it charges higher overdraft fees on premier accounts, SunTrust automatically waives one to three overdraft charges a year on the accounts.
Citigroup is charging 3% of the transaction for certain debit purchases and ATM withdrawals made outside the U.S. Last year it charged 2%. Its fund transfers to cover overdrafts are being rounded to the nearest $100 to buffer additional transactions. It also is deducting a $10 transfer fee from checking instead of savings accounts. It also increased its overdraft fee to $34 per incident from $30 in May 2009. It considers the fee in line with industry standards.
Consumer advocacy groups are already monitoring the fees, saying that the banks are perpetrating the downward debt spiral for vulnerable consumers.
courtesy of cuna.org
Credit unions might want to monitor this development and market more aggressively their own low rates on checking accounts.
Banks are making it easier for consumers to spend more than they have in their checking accounts, and when consumers do, the banks hit them with steeper punitive fees, according to USA TODAY (May 28).
Also rising: ATM fees, minimum balance requirements for interest checking accounts, and monthly service fees. These fees hit record highs during 2008, according to Bankrate.com. Greg McBride, senior analyst at Bankrate.com, expects these fees to increase even more in 2009.
Several banks have already announced their fee hikes:
Bank of America will raise its monthly fee on some checking accounts and start charging a fee on accounts that remain overdrawn. The reason for the fees: the bank's costs are up and consumers are riskier today. Beginning this month, BofA will raise its monthly account-maintenance fees on its MyAccess checking to $8.95--a $3 increase. It will begin charging a one-time $35 fee if an account remains overdrawn for five business days. The bank has also increased the number of times customers can be hit with overdraft fees per day to 10, or double that of last year.
Wachovia (now Wells Fargo) doubled its fee for transferring funds to cover an overdrawn checking account to $10. It will charge the fee to a credit card rather than taking it from a linked bank account, which means the consumer could pay interest on the fees. A Wachovia spokesman said the fees were increased to make fees the same across multiple accounts.
SunTrust began charging last month a higher fee on basic checking if a customer overdraws multiple times, similar to what banks have done with late fees on credit card accounts. It also raised its overdraft fee on other bank accounts. Even though it charges higher overdraft fees on premier accounts, SunTrust automatically waives one to three overdraft charges a year on the accounts.
Citigroup is charging 3% of the transaction for certain debit purchases and ATM withdrawals made outside the U.S. Last year it charged 2%. Its fund transfers to cover overdrafts are being rounded to the nearest $100 to buffer additional transactions. It also is deducting a $10 transfer fee from checking instead of savings accounts. It also increased its overdraft fee to $34 per incident from $30 in May 2009. It considers the fee in line with industry standards.
Consumer advocacy groups are already monitoring the fees, saying that the banks are perpetrating the downward debt spiral for vulnerable consumers.
courtesy of cuna.org
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