WASHINGTON (10/6/08)--Friday's passage of the Emergency Economic Stabilization Act of 2008 will require the National Credit Union Administration (NCUA) to immediately increase share insurance protection to $250,000 on all types of accounts until Dec. 31, 2009.
President George W. Bush signed the economic rescue package just hours after it was passed by the House 263-171. The Senate approved the bill on Wednesday.
The NCUA said it is reviewing all share insurance coverage materials included on the Internet Share Insurance Tool Kit, such as the "Your Insured Funds" brochure and print advertisement, to make needed revisions.
Revised documents reflecting $250,000 coverage will be posted to the NCUA website as soon as possible, according to the agency.
The overall rescue bill—intended to shore up the nation's economy in light of such factors as the current mortgage crisis and wildly fluctuating activity on Wall Street—would allocate up to $700 billion to the U.S. Treasury Department to buy up mortgage-backed securities whose values have dropped or become hard to sell.
The package gives the government an ownership share in the companies that participate in the program, an element that was missing from earlier rescue drafts. This provision makes it so taxpayers could benefit from any increased value in the securities created by the government's support.
After the bill became law, CUNA President/CEO Dan Mica said, "Credit unions had no hand in creating the root cause of the problem this bill aims to fix. Without question, however, they and their members like so many others are collateral damage of the economic hardship that has resulted.
"In that sense, Congress had to act to avert any additional damage to the nation's economy and inject confidence in our financial system. Along those lines, credit unions appreciate the fact that the bill reflects our priority of raising the level of federal deposit insurance at credit unions (through National Credit Union Share Insurance (NCUSIF) coverage) to $250,000, giving credit unions parity with the same increase for banks and the FDIC.
"This action sends a vital message to credit union members and consumers that their federally-insured deposits in credit unions remain safe."
courtesy of cuna.org
Monday, October 6, 2008
Investor tips for topsy-turvy market
WASHINGTON (10/6/08)--If you're brave enough to open your investment statements this month, do so calmly. Fight the urge to make short-term decisions that could be even more costly in the long-term (Kiplinger's November issue).
It's a fact: People are biologically programmed to make poor decisions while under stress. So take steps now to reduce stress and to position yourself for a softer landing when the market rebounds:
Make friends with cash. A well-oiled portfolio--even in boom times--includes some cash for emergencies. Shore up your cash reserves now, if you haven't already. The right amount for you depends on the security of your job, cost of living, and appetite for risk (Businessweek.com Feb. 19). Keep the money in a National Credit Union Administration (NCUA)-insured savings or money market account at the credit union, which is now insured up to $250,000.
Don't push the panic button. If shock over the decline in your investment balances causes you to go on a selling spree, remember this: Your paper losses likely will turn into real losses if you don't have investments in place to recoup those losses when the market turns upward (Smartmoney.com Sept. 17).
Make sure you're diversified. Review your investment accounts. By spreading your portfolio among international and domestic stocks, bonds, commodities, cash, and other investments, you get more reward for less risk. Caution: Make sure you understand the investments you choose, and steer clear of complex investments you can't explain.
Don't stop investing. Think of stock price declines as a bargain or sale on investments. By shying away from the market now, you may be making a mistake and missing out on low prices. Remember the dollar cost average principle: You buy more when the price is low and less when the price is high. If you have less than a five-year time horizon before you need to begin pulling your money out for retirement or other long-term goals, you need to reevaluate your investment strategy altogether, putting safety ahead of risk.
Don't eliminate all risk. If you do, you may hurt your investment return over the long term.
courtesy of cuna.org
It's a fact: People are biologically programmed to make poor decisions while under stress. So take steps now to reduce stress and to position yourself for a softer landing when the market rebounds:
Make friends with cash. A well-oiled portfolio--even in boom times--includes some cash for emergencies. Shore up your cash reserves now, if you haven't already. The right amount for you depends on the security of your job, cost of living, and appetite for risk (Businessweek.com Feb. 19). Keep the money in a National Credit Union Administration (NCUA)-insured savings or money market account at the credit union, which is now insured up to $250,000.
Don't push the panic button. If shock over the decline in your investment balances causes you to go on a selling spree, remember this: Your paper losses likely will turn into real losses if you don't have investments in place to recoup those losses when the market turns upward (Smartmoney.com Sept. 17).
Make sure you're diversified. Review your investment accounts. By spreading your portfolio among international and domestic stocks, bonds, commodities, cash, and other investments, you get more reward for less risk. Caution: Make sure you understand the investments you choose, and steer clear of complex investments you can't explain.
Don't stop investing. Think of stock price declines as a bargain or sale on investments. By shying away from the market now, you may be making a mistake and missing out on low prices. Remember the dollar cost average principle: You buy more when the price is low and less when the price is high. If you have less than a five-year time horizon before you need to begin pulling your money out for retirement or other long-term goals, you need to reevaluate your investment strategy altogether, putting safety ahead of risk.
Don't eliminate all risk. If you do, you may hurt your investment return over the long term.
courtesy of cuna.org
CUNA: Uptick of peak borrowers at expense of youth?
MADISON, Wis. (10/6/08)--Credit unions are increasing their ranks of "peak borrowers" (members age 25 to 44) but apparently are slipping in their abilities to attract "future borrowers" (those 18 to 24) to their memberships.
So says the Credit Union National Association's (CUNA) 2008 Member Statistics research study--a precursor to its National Member Survey and Survey of Potential Members, scheduled for release in April, 2009.
"Over the past several years, many credit unions have been working diligently to attract more members in the peak borrowing ages, in an effort to improve their lending volume," said Jon Haller, CUNA's director of corporate and market research.
"Success in these efforts, combined with the initial signs of a long-awaited turnaround in the prevalence of peak borrowing consumers, are no doubt behind the first rise in peak borrowers that credit unions have recorded in more than two decades."
But while great news from a near-term lending perspective--the negative impact of the current U.S. economy notwithstanding--credit unions' gains in peak borrowers appear to come at the expense of any significant growth in future borrowers, who are one of the primary keys to credit unions' longer-term success, Haller said in his October Research Review.
Past CUNA studies have shown that non-member young adults are the group most likely to say they are eligible to join a credit union and least likely to be familiar with the benefits, advantages, and financial services that credit unions provide. They comprise a large, attractive target--if perhaps a somewhat unwilling one, to this point--for credit unions' membership-growth efforts, he said.
"It's clear that a number of credit unions have recognized--some of them, years ago--the extreme importance that young adults hold for the organization's future, and have had tremendous success in bringing them into the fold," Haller said. "However, the credit union movement, as a collective group, appears to still have a great deal of room for improvement in this area."
Many credit unions that have attracted large numbers of young adults would say that it takes time, effort and especially, commitment--from the CEO, executives, and board, alike--to make this happen, he said, adding, "If your credit union has yet to take these steps, there's no better time than the present to begin the process."
courtesy of cuna.org
So says the Credit Union National Association's (CUNA) 2008 Member Statistics research study--a precursor to its National Member Survey and Survey of Potential Members, scheduled for release in April, 2009.
"Over the past several years, many credit unions have been working diligently to attract more members in the peak borrowing ages, in an effort to improve their lending volume," said Jon Haller, CUNA's director of corporate and market research.
"Success in these efforts, combined with the initial signs of a long-awaited turnaround in the prevalence of peak borrowing consumers, are no doubt behind the first rise in peak borrowers that credit unions have recorded in more than two decades."
But while great news from a near-term lending perspective--the negative impact of the current U.S. economy notwithstanding--credit unions' gains in peak borrowers appear to come at the expense of any significant growth in future borrowers, who are one of the primary keys to credit unions' longer-term success, Haller said in his October Research Review.
Past CUNA studies have shown that non-member young adults are the group most likely to say they are eligible to join a credit union and least likely to be familiar with the benefits, advantages, and financial services that credit unions provide. They comprise a large, attractive target--if perhaps a somewhat unwilling one, to this point--for credit unions' membership-growth efforts, he said.
"It's clear that a number of credit unions have recognized--some of them, years ago--the extreme importance that young adults hold for the organization's future, and have had tremendous success in bringing them into the fold," Haller said. "However, the credit union movement, as a collective group, appears to still have a great deal of room for improvement in this area."
Many credit unions that have attracted large numbers of young adults would say that it takes time, effort and especially, commitment--from the CEO, executives, and board, alike--to make this happen, he said, adding, "If your credit union has yet to take these steps, there's no better time than the present to begin the process."
courtesy of cuna.org
Friday, October 3, 2008
Bush highlights CU share insurance
WASHINGTON (10/3/08)—Correcting earlier omissions that the White House categorized as "oversights," President George W. Bush Thursday clearly and unequivocally included credit unions in his remarks following a meeting with business leaders about the pending economic rescue package.
The Credit Union National Association (CUNA) urged the President last week to instruct those within his administration to include federal credit union share insurance in messages meant to reassure Americans about the safety of their federally insured deposits.
In a message apparently intended to spur support in the House for the Senate-approved $700 billion rescue plan, Bush said:
"A lot of people are watching the House of Representatives now to determine whether or not they will be able to act positively on a bill that has been improved. People say, what do you mean by that? Well, the insurance for the FDIC goes up to $250,000. That's an improvement to the legislation -- not only for banks but for credit unions, as well."
John Magill, CUNA senior vice president of legislative affairs, said, "In addition to our letter to the President, we also talked to the White House at the highest levels and they agreed that credit union share insurance should be mentioned in future remarks. They are making good on that now."
Wednesday night, the Senate voted 74-25 in favor of the multi-billion dollar financial rescue package, which included a temporary increase in federal share and deposit insurance coverage to $250,000 for regular accounts. Retirement accounts continue to be covered up to $250,000 at federally insured depository institutions.
The Senate housing rescue includes an amendment barring the NCUA and Federal Deposit Insurance Corp. from factoring the insurance ceiling increase into decisions about assessing a premium.
The House is widely expected to vote on the economic rescue plan Friday.
courtesy of cuna.org
The Credit Union National Association (CUNA) urged the President last week to instruct those within his administration to include federal credit union share insurance in messages meant to reassure Americans about the safety of their federally insured deposits.
In a message apparently intended to spur support in the House for the Senate-approved $700 billion rescue plan, Bush said:
"A lot of people are watching the House of Representatives now to determine whether or not they will be able to act positively on a bill that has been improved. People say, what do you mean by that? Well, the insurance for the FDIC goes up to $250,000. That's an improvement to the legislation -- not only for banks but for credit unions, as well."
John Magill, CUNA senior vice president of legislative affairs, said, "In addition to our letter to the President, we also talked to the White House at the highest levels and they agreed that credit union share insurance should be mentioned in future remarks. They are making good on that now."
Wednesday night, the Senate voted 74-25 in favor of the multi-billion dollar financial rescue package, which included a temporary increase in federal share and deposit insurance coverage to $250,000 for regular accounts. Retirement accounts continue to be covered up to $250,000 at federally insured depository institutions.
The Senate housing rescue includes an amendment barring the NCUA and Federal Deposit Insurance Corp. from factoring the insurance ceiling increase into decisions about assessing a premium.
The House is widely expected to vote on the economic rescue plan Friday.
courtesy of cuna.org
'Forget banks, join the CU' is just one headline
MADISON, Wis. (10/3/08)--Credit unions have got to love the headlines that have appeared about them the past week in both local and national media while the nation struggles with the financial crisis.
Two of the latest examples: "Forget Banks, Join the Credit Union," from West Orlando News (Oct. 2), and "Credit unions are doing just fine," from Indiana TV station WFIE (Oct. 1).
Credit unions "may be among the safest financial institutions in the nation, despite our nation's current economic struggles," says the West Orlando News article. It notes credit unions are gaining recognition among consumers and on Capitol Hill for avoiding the problems that created the financial mess, and for being part of the solution.
Greg Smith, president/CEO of Pennsylvania State Employees CU and Bill Hayes, former chairman of the Pennsylvania Bankers Association, discussed the impact of the financial crisis on Pennsylvania consumers on the Pennsylvania Cable Network (PCN) Wednesday (Life is a Highway Oct. 2). During the hour-long call-in show, Smith said credit unions are federally insured. He told how the National Credit Union Share Insurance Fund is equivalent to that of the FDIC.
In the article, Florida Credit Union League President/CEO Guy M. Hood tells about credit unions' federal insurance with the National Credit Union Administration (NCUA) and notes that "when it comes to personal finances, credit unions are here to serve, to counsel and to protect their membership compassionately."
Credit Union National Association (CUNA) Chief Economist Bill Hampel explains that credit unions are in very good shape and that delinquencies are up but low in comparison with other financial institutions. (Use link for complete article.)
Credit unions are providing a safe haven to investors during the financial crisis, says the WFIE Indiana story. It features Kate Baumgartner of Evansville FCU, and Ruth Gaon of Heritage FCU, Newburg, who have seen depositors moving money from banks to their credit unions (14 News Oct. 1).
In New York, Kirk Kordeleski, CEO, Bethpage (N.Y.) FCU, was interviewed Tuesday evening by NBC Channel 4 in Long Island about loans--specifically auto loans and mortgages. It's difficult to get loans because credit is being evaluated more carefully and there isn't as much liquidity, he told the news station.
However, Bethpage FCU has liquidity and is able to lend to its members. Its loan portfolio has grown "substantially," Kordeleski told News Now.
Bethpage's mortgage portfolio grew by $300 million compared with last year--a 12% increase, he said. The credit union has seen growth in fixed and adjustable-rate mortgages, and is one of the few lenders in Long Island that can offer well-priced loans. Homes in the area go from $350,000 to $800,000, he said.
"In a scary and shaky time, there seems to be an opportunity for us," he said. "Credit unions across the country are seeing deposit growth and [an increase in] lending."
In Pennsylvania, Fox 43 News at Ten featured a story about "Nation's Economic Problems hit Main Street in Mechanicsburg." Carol Fastrich, vice president of marketing at Americhoice FCU, reiterated the message that credit unions are safe, sound and secure. She told the station that accounts are insured by NCUA.
WBRE TV, in Wilkes-Barre, Pa., last Friday told viewers that the financial crisis has credit unions busier and focused its story on people who deposit their money in smaller financial institutions. It featured Mark Filbert, CEO of NEPA Community FCU, Stroudsburg (Life is a Highway Oct. 2). (Use the link for the article.)
In the Lebanon Daily News, a letter to the editor by Glenn Rambler, executive vice president of Lebanon (Pa.) FCU resulted in an article, "Local bankers say customers need not fear," which featured Rambler and Jim Starr, director of marketing and media of Pennsylvania Central FCU. They mentioned credit unions' federal insurance. (Use the link for the full article).
courtesy of cuna.org
Two of the latest examples: "Forget Banks, Join the Credit Union," from West Orlando News (Oct. 2), and "Credit unions are doing just fine," from Indiana TV station WFIE (Oct. 1).
Credit unions "may be among the safest financial institutions in the nation, despite our nation's current economic struggles," says the West Orlando News article. It notes credit unions are gaining recognition among consumers and on Capitol Hill for avoiding the problems that created the financial mess, and for being part of the solution.
Greg Smith, president/CEO of Pennsylvania State Employees CU and Bill Hayes, former chairman of the Pennsylvania Bankers Association, discussed the impact of the financial crisis on Pennsylvania consumers on the Pennsylvania Cable Network (PCN) Wednesday (Life is a Highway Oct. 2). During the hour-long call-in show, Smith said credit unions are federally insured. He told how the National Credit Union Share Insurance Fund is equivalent to that of the FDIC.
In the article, Florida Credit Union League President/CEO Guy M. Hood tells about credit unions' federal insurance with the National Credit Union Administration (NCUA) and notes that "when it comes to personal finances, credit unions are here to serve, to counsel and to protect their membership compassionately."
Credit Union National Association (CUNA) Chief Economist Bill Hampel explains that credit unions are in very good shape and that delinquencies are up but low in comparison with other financial institutions. (Use link for complete article.)
Credit unions are providing a safe haven to investors during the financial crisis, says the WFIE Indiana story. It features Kate Baumgartner of Evansville FCU, and Ruth Gaon of Heritage FCU, Newburg, who have seen depositors moving money from banks to their credit unions (14 News Oct. 1).
In New York, Kirk Kordeleski, CEO, Bethpage (N.Y.) FCU, was interviewed Tuesday evening by NBC Channel 4 in Long Island about loans--specifically auto loans and mortgages. It's difficult to get loans because credit is being evaluated more carefully and there isn't as much liquidity, he told the news station.
However, Bethpage FCU has liquidity and is able to lend to its members. Its loan portfolio has grown "substantially," Kordeleski told News Now.
Bethpage's mortgage portfolio grew by $300 million compared with last year--a 12% increase, he said. The credit union has seen growth in fixed and adjustable-rate mortgages, and is one of the few lenders in Long Island that can offer well-priced loans. Homes in the area go from $350,000 to $800,000, he said.
"In a scary and shaky time, there seems to be an opportunity for us," he said. "Credit unions across the country are seeing deposit growth and [an increase in] lending."
In Pennsylvania, Fox 43 News at Ten featured a story about "Nation's Economic Problems hit Main Street in Mechanicsburg." Carol Fastrich, vice president of marketing at Americhoice FCU, reiterated the message that credit unions are safe, sound and secure. She told the station that accounts are insured by NCUA.
WBRE TV, in Wilkes-Barre, Pa., last Friday told viewers that the financial crisis has credit unions busier and focused its story on people who deposit their money in smaller financial institutions. It featured Mark Filbert, CEO of NEPA Community FCU, Stroudsburg (Life is a Highway Oct. 2). (Use the link for the article.)
In the Lebanon Daily News, a letter to the editor by Glenn Rambler, executive vice president of Lebanon (Pa.) FCU resulted in an article, "Local bankers say customers need not fear," which featured Rambler and Jim Starr, director of marketing and media of Pennsylvania Central FCU. They mentioned credit unions' federal insurance. (Use the link for the full article).
courtesy of cuna.org
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