CUNA Announces More Lay-Offs
Credit Union Journal | Thursday, July 2, 2009
WASHINGTON – CUNA, struggling with large losses on its investments, announced another round of lay-offs yesterday, eliminating 18 positions in its Madison, Wis., offices.
The lay-offs are part of an effort to trim operating expenses in the face of millions of dollars of losses on investments. Earlier this year CUNA announced it eliminated eight positions in late 2008, cut matching contributions on employee retirement plans and directed all employees to take a week unpaid furlough.
“The steps we have taken to reduce staff positions are painful ones, especially for those directly impacted,” said CUNA President Dan Mica in a statement. “Individual performance was not a factor in these decisions, which have been driven by the economy and its impact on CUNA’s financial position.”
CUNA reported a $5.7 million loss for 2007 and an $8 million loss for 2008, due to major losses on its investment portfolio.
Over the last two years CUNA has seen a major decline in its investments, which fund retirement benefits and future obligations. The investments, which are 40% in equities and 60% in fixed-income instruments, were up $1.2 million in 2007, but down, with the rest of the markets, by $3.3 million in 2008. Though the investments fluctuate on a daily basis, Mica noted they were up by $430,000 through the middle of June, lending some hope for the year’s performance.
“Whether additional actions will be necessary in the future will be determined by the economy and its impact on our member credit unions, our invested reserves and on the accounting for our defined benefit plan,” said Mica’s statement.
Southwest Corporate FCU Reports Capital Depletion
Credit Union Journal | Thursday, July 2, 2009
DALLAS – Southwest Corporate FCU yesterday reported a $317 million in reduction of capital for May, leaving it with just $13.7 million in retained earnings, meaning it will likely require a depletion of member capital.
The $10 billion corporate said however it is still awaiting the audited financials for U.S. Central FCU to determine how much more it will have to charge against its capital.
Several other corporates, including Members United Corporate FCU and Constitution Corporate FCU, have indicated they will be depleting their members’ capital after U.S. Central reports its financials, which is expected any day. That’s when they will know whether they will have to charge off more than the 23% of their membership capital shares in U.S. Central, which is considered almost certain.
More than 1,000 credit unions have either taken a charge or are preparing to take a charge of representing their capital in WesCorp FCU, a total of $2 billion.
Southwest said it took a charge of $127 million in its U.S. Central capital, representing the 23% mark, for May, as well as a loss of $190 million on its mortgage securities. Southwest has $129.8 million of membership capital shares in U.S. Central still, after taking a charge of $127.2 million in paid-in-capital and MCS in May.
Southwest told its members the $13.7 million will act as a reserve against losses for the time being, but acknowledged it “represents a relatively small buffer to absorb additional investment losses before depletion of (members’ capital) would be necessary.”
NCUA Proposes Its Own Consumer Protection Office
Credit Union Journal | Wednesday, July 1, 2009
ALEXANDRIA, Va. – In an effort to preempt plans to bring credit unions under a new Consumer Financial Protection Agency, NCUA Chairman Michael Fryzel yesterday proposed creating the agency’s own consumer protection office.
NCUA currently has authority over products and services offered by credit unions by rarely, if ever, determines whether they comply with consumer laws and regulations, leaving that to other agencies such as the Federal Trade Commission of the Securities and Exchange Commission.
The new NCUA office would monitor compliance with mortgage laws, credit card rules and regulations and disclosures on products and services sold by credit unions.
“The new office will consolidate existing consumer protection functions already administered by NCUA and would create a liaison relationship with relevant external parties, such as the Consumer Financial Protection Agency, if that proposed entity becomes a reality,” stated Chairman Fryzel, of President Obama’s proposal for a new agency with jurisdiction over all financial products and services. The proposed agency would have broad jurisdiction regarding credit, savings and payment products.
“While NCUA has always placed a high priority on the enforcement of consumer regulations, and credit unions themselves have a strong track record of pro-consumer conduct, it is important that the highest level of compliance with these essential laws be maintained at all times. The creation of a dedicated Consumer Protection Office will make NCUA supervision of consumer protections even more efficient and effective, and will further underscore the priority of this function,” Fryzel said.
Fryzel’s proposal comes as some in the credit union lobby are urging Congress to exempt credit unions from the new consumer agency. NAFCU has suggested that the new agency not have jurisdiction over federally insured depositories, which already monitored by federal agencies like NCUA, the FDIC and Federal Reserve.
Mica touts CU credit cards on Fox
NEW YORK (6/30/09)--Credit Union National Association President/CEO Dan Mica emphasized the benefits of credit union credit cards during Fox Business Network’s “Money for Breakfast” program, which aired Saturday.
Mica and Adam Levin of credit.com were featured on the show to provide insights on recently passed credit card legislation, The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. Mica noted that the legislation would bring change to the credit card industry--including lower fees.
Credit union credit cards are the best deal for consumers, according to a Harvard University study, Mica said. Credit union credit cards offer lower fees and better service for their members.
“[Credit cards] can be done in a way to give consumers a break,” Mica said. “The best deal is with a credit union. We’ve proven you can do it without gouging the customer--our member.”
See the clip here.
NCUA: What Corporate Reform Could Look Like
ALEXANDRIA, Va. – The National Credit Union Administration (NCUA) will begin developing new rules for corporate credit unions this summer with a projected completion date of spring of 2010, moderator and Office of Corporate Credit Union official Scott Hunt said during the NCUA’s webinar on its corporate credit union stabilization plan.
During the webinar, Hunt said that the NCUA will lay out a potential framework for corporate credit unions, and those corporate credit unions will then decide which services they would prefer to offer within that framework. Member credit unions could then decide which corporate credit union they wish to support.
The NCUA board should issue its proposed rules for corporates this fall, according to Hunt.
Hunt said that he does not expect the NCUA to dictate the structure that corporate credit unions must take on. However, he added, the new NCUA rules could lead to some corporate credit union consolidations.
Hunt noted that the “slow run” on corporate credit union shares has abated, as deposit patterns now look to be following seasonal norms. Cash assets have also increased, and the corporates are reestablishing external lines of liquidity.
Western Corporate FCU (WesCorp), which reported $7.6 billion in losses for its 2008 fiscal year, has a capital deficit of $3.5 billion and had its independent audit completed on May 19th.
The NCUA also reported that U.S. Central now has $960 million in capital and that a comprehensive audit of U.S. Central’s financial situation should be completed by July 10th.
Addressing the liquidity of the corporates, Hunt said that both US Central FCU and WesCorp were in “stable but tenuous” condition. External lenders are also starting to lend to the corporates again, as that the NCUA’s recent actions have effectively stabilized the corporate credit union system.
However, Hunt said, natural person credit unions still need to continue to invest in the corporate credit union system, as the NCUA could be forced to sell some or all of U.S. Central’s and WesCorp’s mortgage-backed securities portfolios if those institutions do not have adequate funds available to hold those securities to maturity.
The Credit Union National Association will soon provide an audio archive of the NCUA webinar.
Mica explains CU difference on Bloomberg
On the 100th anniversary of credit unions, Dan Mica talks about what the difference is between credit unions and banks on Bloomberg financial channel. See the clip on YouTube here.
NCUA Predicts $1 Billion September Charge
Credit Union Journal | Thursday, June 25, 2009
ALEXANDRIA, Va. – NCUA told credit unions yesterday they can expect to pay an additional charge of about $1 billion into the National CU Share Insurance Fund this September.
The charge is separate from a $1 billion payment credit unions will make this year in the attempt to revive U.S. Central FCU and WesCorp FCU.
“It could be higher. It could be lower. That’s our best estimate,” said NCUA’s Chief Examiner Melinda Love during yesterday’s webinar explaining the corporate credit union bailout.
NCUA is currently estimating the NCUSIF premium at 15 basis point (0.15% of assets), equating to about $1 billion. The premium is expected to be voted at the NCUA Board’s September meeting.
The NCUSIF premium comes as many credit unions are expected to accrue additional charges for depleted capital in their corporates, Love acknowledged.
The total bill to credit unions for this year will be at least $3 billion, wiping out all of any projected net income for the year.
At least half a dozen large corporates have indicated they will be taking a charge against their capital due to the loss of their capital in U.S. Central and losses on their mortgage backed securities. WesCorp’s 1,022 members are in the process of charging off $2 billion in the failed corporate, and Members United Corporate FCU, Constitution Corporate FCU and Southwest Corporate FCU have all indicated they will be taking charges against capital.
The news comes as NCUA approved new guidelines for its corporate bailout, which will allow NCUA to transfer the $5.9 billion program from the NCUSIF to a newly created Corporate CU Stabilization Fund and stretch out the costs over seven years, instead of one. That means that credit unions will be charged $1 billion this year for the program.
NCUA’s Love explained the NCUSIF premium will be needed to replenish the fund’s reserves to a mandated ratio of 1.3% (dollars reserved per $100 of insured shares). The reserves have been depleted because of the additional costs to resolve troubled credit unions, as well as a dilution of the reserves by the increase in coverage to $250,000 per account, from $100,000. This will add about $50 billion of insured deposits to the NCUSIF’s coverage.
In addition, there has been faster than-expected deposit growth as consumers flee to the safety of federally insured instruments. Credit union shares have grown more than 6% through the first four months, according to CUNA.
NY Times op-ed touts CU credit cards over banks'
In this column, published today by the New York Times, two Harvard doctoral candidates discuss the new credit card legislation and their study comparing credit union and bank credit cards. They conclude credit unions are far more favorable and if banks went in that direction they’d have no problem living under the newly enacted credit card reform legislation:
“Credit union cards demonstrate that punishing fees are not an essential ingredient of profitable lending. This should help assuage fears that the credit card act will bring disaster for credit cards. Rather, it should nudge them toward the gentler credit union model that many Americans already enjoy.”
A Fairer Credit Card? Priceless
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.”
According to Frank, the “good news” for credit unions is that “there is no news,” as Congress is currently busy taking care of the problems created by other financial institutions. While Congress is expected to be occupied with financial regulatory reform through the end of this year, Frank said that he plans to begin a review of credit union powers early next year.
Frank also commended CUNA President/CEO Dan Mica and MA/NH/RI League President Dan Egan for their leadership on behalf of the credit union movement, adding that both Mica and Egan are working to pursue credit union interests with Frank.
NCUA Approves Seven-Year Payback For Corporate Bailout
Credit Union Journal | Thursday, June 18, 2009
ALEXANDRIA, Va.—The NCUA Board ths morning reversed its corporate bailout charges and passed a new bailout plan that will give credit unions seven years to repay the $5.9 billion cost.
The plan enacts provisions of the recently passed Corporate CU Stabilization bill which will create a separate fund to pay for the bailout of U.S. Central FCU and WesCorp FCU, as well as any other corporates that may need assistance, then allow credit unions to pay the costs of the program in seven annual installments.
The program will allow thousands of credit unions to reverse almost $3.2 billion in bailout charges taken at the end of 2008 or the first quarter of 2009, according to Melinda Love, chief examiner for NCUA.
Those charges caused the credit union industry to record a loss of $3 billion for the first quarter, it’s largest ever.
For credit unions that took the charge in the first quarter they will be able to reverse it for the second quarter by booking an equivalent amount as non-operating income for the period, said Love.
For those institutions that took the charge at the end of 2008, they may record the reversed charges as non-operating income for the second quarter of this year, she said. “This will give them a bump in earnings for 2009,” said Love.
Credit unions that took the charge in 2008 or 2009 will be able to add those charges to their net worth for the second quarter (June) call reports, she said.
The effect of the plan is to move the costs of the corporate bailout from the National CU Share Insurance Fund to the new stabilization fund. The Mary Ann Woodson, chief financial officer for NCUA, estimated the first year cost of the fund will be about 15 basis points (0.15%) of assets, which translates into about $1 billion.
But there are dark clouds ahead for credit unions, as several additional factors will deplete the reserves of the NCUSIF further, meaning credit unions will have to replenish it separately by year-end, said Woodson. The estimate cost to replenish the NCUSIF could be as much as another $750 million to $1 billion.
That’s because of three major factors. First is the increase in federal deposit coverage from $100,000 to $250,000 per account which has diluted the reserves for the NCUSIF. The increase in coverage means that the NCUSIF is now insuring an additional $50 billion in credit union deposits.
Second is the growth in shares (deposits) for the industry is running higher than expected as consumers seek the refuge of federally deposit insurance. This will dilute the fund’s reserves even further.
And finally the cost to resolve several large natural person credit unions is expected to be significant and will cut into the NCUSIF reserves even more, said Woodson.
Pandemic declared, reaches phase 6
On June 11, 2009, the World Health Organization (WHO) raised the worldwide pandemic alert level to Phase 6 in response to the ongoing global spread of the novel influenza A (H1N1) virus. A Phase 6 designation indicates that a global pandemic is underway.
More than 70 countries are now reporting cases of human infection with novel H1N1 flu. This number has been increasing over the past few weeks, but many of the cases reportedly had links to travel or were localized outbreaks without community spread. The WHO designation of a pandemic alert Phase 6 reflects the fact that there are now ongoing community level outbreaks in multiple parts of world.
WHO’s decision to raise the pandemic alert level to Phase 6 is a reflection of the spread of the virus, not the severity of illness caused by the virus.
Learn more.
President's pen turns corporate stabilization bill into law
WASHINGTON (5/21/09)—In a ceremony held at the White House on May 20, President Barack Obama signed S. 896, the Helping Families Save Their Homes Act, into law.
CU League of Connecticut President/CEO Tony Emerson (pictured left, at White House) attended the bill-signing ceremony for S. 896 as a guest of cosponsor Sen. Christopher Dodd (D-Conn.) CUNA President/CEO Dan Mica said that Emerson’s invitation by Dodd is a “perfect illustration of the vital role state leagues have in advocacy for the CU movement.” (Photo courtesy of Sen. Dodd’s office)
Of interest to credit unions are portions of the bill that will create a corporate credit union stabilization program to help credit unions weather the ongoing financial crisis and extend the $250,000 share and deposit insurance coverage ceiling until 2013.
Credit Union League of Connecticut President/CEO Tony Emerson attended the signing ceremony as a guest of S. 896 cosponsor Sen. Christopher Dodd (D-Conn.)
The House and Senate approved the bill on May 19.
Under S. 896, the National Credit Union Administration’s (NCUA) borrowing authority will be extended to $6 billion, with a possible further extension to $30 billion under exigent circumstances.
Credit unions may also spread the cost of National Credit Union Share Insurance Fund (NCUSIF) replenishment over a longer period of time, with a total of eight years to deal with the cost of a premium assessment that has resulted from losses at wholesale corporate credit unions. Any impairment related to the NCUSIF replenishment may be booked over a seven-year period.
Representatives from CUNA, the NCUA, and other industry groups also discussed the corporate credit union stabilization plan in a hearing before the House Financial Services subcommittee on financial institutions and consumer credit.
President Obama will have more on his desk by Memorial Day, as the House today voted 361 to 64 to approve H.R. 627, the Credit Cardholders’ Bill of Rights. Once enacted, the bill will rein in many abusive or deceptive credit card practices.
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2009 ICU Day theme announced
MADISON, Wis. (5/21/09)--In response to the challenges facing credit unions and cooperatives worldwide, this year’s International Credit Union (ICU) Day theme will remind people everywhere of the advantages that credit unions provide their members.
ICU Day is Oct. 15 and takes place during National Credit Union Week.
The idea for this year’s theme, “Your Money. Your Choice. Your Credit Union.” was developed by Stan Cowan of A+ FCU in Austin, Texas. The theme celebrates the reasons why 177 million people worldwide choose credit unions. Value, trust and service to members, all represented in the theme, are just a few of the many reasons credit unions are chosen by people seeking access to fair and affordable financial services according to the World Council of Credit Unions (WOCCU).
“This year, more than ever, consumer finance and business experts have repeatedly highlighted credit unions as safe and sound institutions where people can depend on a trusting relationship,” said WOCCU President/CEO Pete Crear. “That is truly an accomplishment we can be proud of in these tumultuous times, and we should celebrate it this October.”
Credit union leaders around the world agree that now is the time to come together and promote the credit union difference, WOCCU said.
“In a time of economic upheaval when control has largely been taken out of the hands of consumers, this year’s theme demonstrates that members, through equal ownership and voting rights, are squarely in charge of their credit unions,” said Dan Mica, president/CEO of the Credit Union National Association (CUNA).
“We are pleased to work with other national and international groups on the campaign to promote International Credit Union Day and Co-op Week,” said David Phillips, president/CEO of Credit Union Central of Canada. “We work with these groups year-round on projects that support important initiatives that help members around the world cope with trying economic times.”
Like their colleagues around the world, credit unions in Peru continue to find new ways to serve their members through changing times,” said Manuel Rabines, second vice chair of WOCCU and president of the Peruvian National Credit Union Association. “As a global movement, it’s important we take time this year to demonstrate our strength and remind people about the many benefits we provide to our members.”
ICU Day has been celebrated annually on the third Thursday of October since 1948. The celebration of Co-op Week that same week in Canada became a national event in 1982. In the U.S., October is also designated as National Cooperative Month celebrating all cooperatives including grocery, agricultural and energy co-ops, and credit unions.
“While today’s economic times pose serious challenges, they also provide an opportunity for the cooperative sector to demonstrate the differences between co-ops and traditional business models,” said Canadian Co-operative Association Executive Director Carol Hunter. “We know that people are increasingly interested in supporting organizations that are open, democratic and put people before profits, and that’s what cooperatives and credit unions are all about.”
Credit Card Practices Bill Approved by Senate
WASHINGTON — The Senate on Tuesday voted 90-5 to approve H.R. 627, the Credit Cardholders’ Bill of Rights, which would prohibit lenders from making arbitrary changes to the interest rates and terms associated with a card that holds an existing balance.
Under the provisions of the bill, lenders must maintain low introductory rates for six months and may not increase the annual percentage rate (APR) on a credit card for the first year that the credit account is open. If a lender chooses to raise a cardholder’s interest rate, the lender must inform the cardholder 45 days before that rate is raised.
Card issuers would also be prevented from changing the payment conditions of any credit card. However, lenders would be allowed to increase interest rates once an account has been delinquent for 60 days. In a May 19 statement, Senator and bill co-sponsor Christopher Dodd (D-Conn.) said the bill “will insist on consumer protections that are strong and reliable, rules that are transparent and fair, and statements that are clear and informative.”
While the bill as passed by the Senate would “help rein in” many abusive credit card practices, CUNA President/CEO Dan Mica said Tuesday he was concerned that some portions of the bill could “have the unintended consequence of raising compliance costs and making credit more expensive and less available to consumers.”
Legislation mirroring the existing legislation that has been adopted by federal bank and credit union regulatory agencies would have been more palatable for credit unions, the CUNA statement said. The bill, as currently amended, does not address interchange fees, but will commission a study of interchange fees by the Government Accountability Office.
CUNA has consistently opposed any changes to the current interchange fee regulations, and said Tuesday that “efforts to affect interchange and other elements of the payment processing system would have detrimental effects on the credit unions who issue debit cards and credit cards for their members.”
CUNA said the decision to begin a GAO study of interchange rates was “a more prudent approach” than hastily revising the current regulations.
The House version of the bill passed 357-70 in late April. It is believed that portions of the bill were crafted to ensure quick passage, and Congress will now try and reconcile any differences between the two bills. President Barack Obama has asked Congress to deliver the final legislation to his desk by Memorial Day.
House, Senate Pass Corporate Stabilization Bill
WASHINGTON — The House and Senate on May 19 approved S. 896, the Helping Families Save Their Homes Act, which would extend $250,000 share and deposit insurance coverage and help credit unions manage the impact of the financial crisis on the credit union system through a corporate stabilization program.
The bill, which passed the House yesterday afternoon on a 367-54 vote, would extend the $250,000 federal share and deposit insurance ceiling until 2013. This ceiling is set to expire at the end of the current year.
Just hours after the House vote, the Senate approved the bill by unanimous consent. The bill now goes to the President, who is expected to sign it before the end of the month.
Under S. 896, the National Credit Union Administration’s (NCUA) borrowing authority would also be extended to $6 billion, with a possible further extension to $30 billion under exigent circumstances, under the provisions of the bill.
The legislation, as passed, would also permit credit unions to spread the cost of National Credit Union Share Insurance Fund (NCUSIF) replenishment over a longer time period.
Credit unions would be given eight years to deal with the cost of a premium assessment that has resulted from losses at wholesale corporate credit unions. Credit unions also would be allowed to book any impairments related to the NCUSIF replenishment over a seven-year period.
The NCUA’s corporate credit union stabilization plan will be discussed today in a hearing before the House Financial Services subcommittee on financial institutions and consumer credit, with Service 1st FCU President/CEO Bill Lavage speaking on behalf of the Credit Union National Association. NCUA Chairman Michael Fryzel will also represent the regulator in a separate panel during the hearing.
Credit Union National Association President/CEO Dan Mica in a statement yesterday had urged the Senate to approve S. 896 quickly. “This important legislation will help credit unions continue to help their members weather the financial crisis and maintain member confidence in credit unions,” Mica said.
After the House vote, NCUA’s Fryzel issued a statement, which said, “Congress has acted quickly and appropriately in helping NCUA and the credit union industry deal with the corporate situation through the Corporate Stabilization Program.” He added that he hoped the bill would quickly be enacted into law.
Congress Passes Corporate Bailout Bill
Credit Union Journal | Tuesday, May 19, 2009
WASHINGTON – The House voted passage this afternoon of a bill passed by the Senate last week which will enact the corporate credit union bailout.
The bill, which is now on its way to President Obama for his signature, will create a $6 billion Corporate CU Stabilization Fund; allow NCUA to stretch out the costs of the corporate bailout for as long as eight years; and provide $30 billion in emergency funding for NCUA to stem a systemic crisis.
The main feature of the bill is the provision to stretch out the costs of the bailout, which will allow credit unions that reported a first-quarter charge for their share of the bailout costs to add those charges back into their financials, and take them over eight years instead.
The bill also includes provisions to advance the banking bailout, including authority for the FDIC to borrow as much as $500 billion to resolve growing numbers of bank failures.
It also extends for four years the increase in deposit insurance coverage to $250,000 per account.
Passage of the bill comes a day before the House is scheduled to hold hearings on the corporate bailout, where NCUA Chairman Michael Fryzel, as well as representatives of CUNA, NAFCU and NASCUS will testify.
Update on swine influenza outbreak from Homeland Security
The Department of Homeland Security has released an Infrastructure Impact Assessment for the recent swine influenza outbreak. The document includes key findings, an overview of the current outbreak and information on pandemics.
The document also includes recommendations to prevent illness:
Individuals who have recently traveled to Mexico and are exhibiting influenza-like symptoms should seek medical guidance. The CDC is encouraging individuals in the impacted areas of California, Texas, and those traveling to Mexico to take everyday preventive actions such as:
Cover your nose and mouth with a tissue when you cough or sneeze. Throw the tissue in the trash after use;
Wash your hands with soap and water, especially after you cough or sneeze. Alcohol-based hand cleaners are also effective;
Avoid close contact with anyone who appears sick;
If you get sick, stay home from work or school, and limit contact with others; and
Avoid touching your eyes, nose, or mouth.
Click here for the IIA from the Department of Homeland Security.
Additional information is available at the Centers for Disease Control and Prevention Web site.
NCUA says guidance coming on 'extinguishment'
ALEXANDRIA, Va. (4/16/09)—The National Credit Union Administration (NCUA) intends to issue its next accounting guidance on corporate credit union issues Friday as part of its weekly release of information on the corporate situation.
NCUA Deputy Executive Director Larry Fazio, on a conference call with reporters Wednesday, said the guidance will address the impairment—what the agency is now terming “extinguishment"—of any OTTI statement that U.S. Central FCU or Western Corporate FCU (WesCorp) make on their March 31 financial reports. The two corporates were placed in conservatorship in March.
Fazio said that to the extent either entity has to execute an OTTI—or other-than-temporarily-impaired--charge for the March statement, it will be realized as a loss that will “eat through” their retained earnings, and then their paid-in capital accounts, and, to a varying extent, their membership capital accounts.
“So that will extinguish those portions of the membership capital and paid-in capital,” Fazio said. “Therefore credit unions that are members will have to write down on their financial statements those instruments, and realize a loss on those.”
Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn noted Wednesday that credit unions have raised serious concerns about the implications of the extinguishment of capital in the two corporates. CUNA, she said, is pursuing these concerns with NCUA board members.
NMCUEF awards $48,600 in scholarships
ALBUQUERQUE, New Mexico (April 14, 2009)—The New Mexico Credit Union Education Foundation (NMCUEF) recently awarded a total of $48,600 in scholarships to 81 students in New Mexico for the 2009-2010 school year. Each scholarship recipient was given $600. Applications from more than 400 students were received and 41 of the recipients were re-applicants. Applicants must be New Mexico residents and meet a number of requirements, including grade point average and full-time enrollment.
The New Mexico Credit Union Education Foundation is a unique scholarship program formed through special legislation that allows credit unions to use abandoned funds for educational or charitable purposes. Since it was established in 1992, the New Mexico Credit Union Education Foundation has presented 870 scholarships for a total of $430,600 to students attending accredited vocational or technical school, college or university in New Mexico.
Recipients of the scholarships and their schools by hometown are:
Alamogordo
John Davisson — New Mexico State University
Kattie Dean —New Mexico State University
Deidre Davis – NMSU-Alamogordo
Dennis Magee Jr. – University of New Mexico
Albuquerque
Lauren Cala — University of New Mexico
Darlene Chavez – University of New Mexico
Sharla Frazier — Central New Mexico Community College
Delana M. Gonzales — University of New Mexico
Meghan Hedrick – University of New Mexico
Rayanna Johnson – Highland High School
Tiffany Martinez – University of New Mexico
Lindsay McGhee – Central New Mexico Community College
Alicia Montoya – Southwest Indian Polytechnic Institute
Rachel Powell – University of New Mexico
Melissa Tafoya — New Mexico Highlands University-Rio Rancho
Amy Wenker – Central New Mexico Community College
Ashley Zamora-Rizzieri – University of New Mexico
Alcalde
Francisco Vigil – McCurdy High School
Arrey
Monica Bencomo—University of New Mexico
Artesia
Dusty Anderson – Artesia High School
Kyla Taylor – Artesia High School
Buena Vista
Cassandra Silva – Mora High School
Carlsbad
Sara Aldaz – Carlsbad High School
Cassandra Marrs—Eastern New Mexico University
Chimayo
Angelo Medina – Espanola Valley High School
Cloudcroft
Margaret Carter — St. John’s College
Clovis
Clay Beevers – New Mexico Tech
Logan Potts — New Mexico State University
Corrales
Steven E. Olona — New Mexico Tech
Deming
Jessica Benningfield—Deming High School
Marisa Holguin – Deming High School
Dexter
Dustin D. Davenport — New Mexico State University
El Rito
Mariano Trujillo II – Mesa Vista High School
Encino
Ashley Garcia – Vaughn High School
Española
Jacqueline Abeyta – Northern New Mexico College
Tamara L. Gallegos —Northern New Mexico College
Robin Montoya — New Mexico Institute of Mining and Technology
Michael Torrez – Northern New Mexico College
Farmington
Clifford Harris Jr. — San Juan College
Guadalupita
Kyanne Fields – Mora High School
Hatch
Martha Soto – Hatch Valley High School
Hernandez
Ashley Martinez – Mesa Vista High School
Hurley (North)
Diane Ortega — Western New Mexico University
Las Cruces
Theresa Carr – New Mexico State University
Brianna Dozier – Las Cruces High School
Ron A. Garcia — New Mexico State University
Bethany L. Fritz Hufferd — New Mexico State University
Kalie Geary – New Mexico State University
Nicole Nava – New Mexico State University
Amber Quinones – Onata High School
Las Vegas
Leigha Gallegos – Luna Community College
Logan
Johanna Albright – Logan High School
Loving
Natalie Rodriguez – Loving High School
Lovington
Bridgette Davis – New Mexico Junior College
Mora
Sonya Martinez — New Mexico State University
Ojo Caliente
Ashley Gallegos — Northern New Mexico College
Portales
Wendy Stokes — Eastern New Mexico University
Jessica Huff – Eastern New Mexico University
Ranchos de Taos
Danielle Lee Griego — University of New Mexico
Regina
Michael Schmitz – Coronado High School
Roswell
Heather Fogarty – Goddard High School
Elizabeth Mysza — University of New Mexico
Meghan Sanchez – Goddard High School
Braden Wagner – Goddard High School
Salem
Alma Hernandez – Hatch Valley High School
San Juan Pueblo
Adriana Martinez – Northern New Mexico College
Santa Cruz
Cassandra Olivas – Espanola Valley High School
Santa Fe
Alicia Armijo — University of New Mexico
Ryan D. Baca — Capital High School University of New Mexico Santa Fe
Charmaine Mares – University of Phoenix
Angelica Padilla – St. Michael’s High School
Jayla Read – University of Phoenix
Esperanza Rodriguez — Northern New Mexico College
Rachel Romero – University of New Mexico
Truth or Consequences
Tyler X. Long — Western New Mexico University
Mario Trujillo — University of New Mexico
Tucumcari
Rusty Dwayne Brake — Eastern New Mexico University
Ashley Lopez – Tucumcari High School
Velarde
Crystal Gonzales – Northern New Mexico College
NCUA provides deeper info on corporate analysis
ALEXANDRIA, Va. (4/13/09)—National Credit Union Administration (NCUA) Chairman Michael Fryzel Friday released a summary of the agency’s analysis of the distressed securities held by U.S. Central FCU (U.S. Central) and Western Corporate FCU (WesCorp).
In what was the NCUA’s third weekly update on corporate credit unions, the chairman noted that the “incomplete or insufficient nature” of available information on the agency’s action addressing corporate credit union stabilization has “led some to question the necessity of the NCUA’s actions and level of expected credit losses being projected.”
In fact, the Credit Union National Association (CUNA) has repeatedly requested more information regarding NCUA’s corporate stabilization actions and filed a formal Freedom of Information Act (FOIA) in March. The agency has 20 days from the March 30 request date to respond, but extensions to that deadline are possible.
Fryzel said the portfolio outlines released Friday and the NCUA’s associated summary analysis provides a “concise synopsis of the respective portfolios and enables informed parties to appreciate the scope and severity of the stress on these investments.”
“Though virtually all of the securities purchased by these two corporate credit unions were AAA- or AA-rated at the time of purchase, the summary clearly demonstrates how the nature of the securities and the deterioration in the economy have resulted in significant expected credit losses. In the near future NCUA will also be releasing a summary of the PIMCO report,” Fryzel said.
The chairman added that the agency also will be addressing the “many questions” surrounding how member credit unions will account for any impairment or write-down of paid-in-capital and membership capital accounts at corporate credit unions. The NCUA, Fryzel promised, will be issuing guidance next week on this subject.
NCUA Weekly Update on Corporate CUs
CUNA Comprehensive Resource: NCUA’s Corporate Stabilization Program
Treasury Calls For Benefit Recipients To Go Direct By April 20
The Treasury Department and Vice President Joe Biden are calling on all Americans who are federal benefit recipients and still get checks in the mail to sign up for direct deposit, a small step that will help the government save millions and lessen the possibility for check fraud. 
Under the American Recovery and Reinvestment Act, the Treasury Department’s Financial Management Service (FMS) will issue more than 64 million one–time $250 payments to Social Security, Supplemental Security Income, Railroad Retirement, and Veteran Affairs benefit recipients to make tough economic times a bit easier. An estimated 80% of these payments will be made electronically, leaving the remaining recipients until April 20 to switch from checks to direct deposit before the first disbursements are made in early May. Those individuals who switch to direct deposit will experience safer, more secure delivery of their economic recovery payment, as well as all future benefit payments, and will receive their payment sooner than those who wait for the mail delivery of a check.
Encourage members who receive federal benefits to sign up for direct deposit at www.godirect.org.
GM Extends Invest In America Program
The General Motors credit union special pricing program, offered through Invest In America, has been extended through year-end. Under the GM Credit Union Discount, all current and new credit union members receive the GM Supplier Discount on any eligible new vehicle through December 31, 2009. Chrysler’s Credit Union Member Cash discount currently runs through June 30.
To keep your credit union informed of all changes and additions to the Invest in America program, credit unions must register a key contact person to get a log-in for the Invest in America Web site. In the next few weeks, credit union specific numbers will be posted in the partner center, which will become password-protected, accessed via the key contact registration.
Credit unions are encouraged to visit the partner center to access free marketing materials. There are Web banners, ads, statement stuffers, newsletter articles, logos, and more all free to promote the program.
For questions on the program, visit http://www.lovemycreditunion.org/ .
NCUA reiterates: Flexible stance on impairment accounting
WASHINGTON (4/2/09)—The National Credit Union Administration (NCUA) intends to issue an accounting bulletin stating the agency will be flexible about when a credit union books the cost of the premium being assessed to replenish the National Credit Union Share Insurance Fund (NCUSIF).
In a communication provided to the Credit Union National Association (CUNA) yesterday the NCUA said it will not object if a credit unions works with its accountant and delays booking the impairment of the 1% NCUSIF deposit.
The insurance costs, which include replenishing the 1% NCUSIF deposit and an insurance premium to restore the NCUSIF to 1.3%, pay for the costs to the NCUSIF associated with NCUA’s actions involving corporate credit unions.
These actions include placing U.S. Central FCU and Western Corporate FCU into conservatorship March 20, providing deposit guarantees for corporate credit unions and $1 billion in capital to U.S. Central. The bulletin language will state, “The regulatory reporting guidance in Accounting Bulletin 09-2 reflects the actions the NCUA has taken which appropriately should be reported by the March 31, 2009 quarter-end.
“The various proposed legislative alternatives, if granted by Congress and acted upon by the board, could help the credit union industry spread the impact of assessments to reposition the NCUSIF to cover future losses.”
The agency announced last week that it has drafted legislation that will allow credit unions to spread out the deposit replenishment costs. There is also pending legislation to allow NCUA to spread out insurance costs for up to five years.
CUNA supports such legislative action and continues to urge that insurance costs be spread out over seven or eight years. CUNA also supports legislation to increase the agency’s borrowing authority to help finance the insurance costs.
The bulletin, expected this week, will provide official notice of what a senior NCUA staff member told CUNA last week (News Now March 30).
Addressing the need for congressional action for the bill to become law—and the uncertainty that surrounds that process—the NCUA bulletin will state that if a credit union’s licensed practitioner is willing to provide a written opinion that allows for the delay in the recording of the expenses and indicates in their opinion it is in compliance with GAAP, NCUA examiners will not take exception absent a definitive ruling from the accounting profession to the contrary.
CUNA seeks balance in card protections
WASHINGTON (4/1/09)—The Credit Union National Association (CUNA) said Tuesday it supports the intent of a Senate Banking Committee bill to protect consumers from abusive practices, but warned that a balance must be maintained to prevent unintended consequences to consumers.
The committee voted 12 to 11 in favor of the bill (S. 414) that would amend the Consumer Credit Protection Act to ban abusive credit practices, enhance consumer disclosures and protect underage consumers.
CUNA President/CEO Dan Mica sent a letter to Chairman Christopher Dodd (D-Conn.), prior to his committee’s vote, asking lawmakers’ caution to avoid unintended consequences which “would ultimately be adverse to consumers, including making credit more expensive and less available for consumers.”
Mica noted new rules promulgated last year by the Federal Reserve Board, the Office of Thrift Supervision, and the National Credit Union Administration. Those rules restrict and prohibit a number of credit cards practices considered unfair or deceptive under the Unfair and Deceptive Acts and Practices Act (UDAP) and the Fed’s Reg Z.
“Credit unions are just beginning the long process of working with their forms suppliers, data processors, statement providers and training resources to ensure they will be in compliance with the new Reg. Z rules and UDAP requirements by their effective date of July 1, 2010.
“We encourage the committee to give the new rules time to work before imposing additional burden on credit unions,” Mica wrote.
Mica tests waters: Higher borrowing, longer write-off
WASHINGTON (4/1/09)—An amendment to improve the National Credit Union Administration (NCUA) borrowing position with the U.S. Treasury, as well as allow credit unions to spread out their impending premium payment, is a “significant step” toward relief for credit unions, according to the Credit Union National Association (CUNA).
After the Senate Banking Committee voted unanimously to adopt the amendment Tuesday, CUNA President/CEO Dan Mica sent a letter to its sponsors, Sens. Mike Crapo (R-Idaho) and Bob Corker (R-Tenn.), commending their actions. The language was added to a bill on best credit card practices.
The amendment would: increased NCUA borrowing authority to $6 billion; triple that to $18 billion in times of emergency; and allow credit unions to spread out realizing the premium cost associated with NCUA’s corporate credit union stabilization efforts over five years.
Mica wrote that CUNA, however, would welcome an opportunity to discuss whether a seven- or eight-year repayment period, similar to what the Federal Deposit Insurance Corp. has requested for banks, might be considered by Congress.
He also tested the waters for a congressional appetite to consider a higher borrowing authority for the NCUA. The agency has requested $30 billion in borrowing authority, and has proposed legislation that would allow credit unions to spread realization of the premium over as many as seven years.
The Mica letter noted that credit unions are being buffeted by circumstances in the economy that are beyond their control. They also are facing significant costs related to the NCUA’s actions concerning corporate credit unions, and are funding losses as a result of declines in the values of mortgage-backed securities in which corporates had invested when prudent.
“We appreciate your efforts to address theses matters in this legislation and look forward to working with you on these issues,” Mica wrote.
Senate card bill includes NCUA emergency borrowing
WASHINGTON (4/1/09)—Voting 12 to 11 in favor of a credit card best practices bill, the Senate Banking Committee passed legislation Tuesday that included consideration of amendments important to credit unions, including creating National Credit Union Administration (NCUA) emergency lending authority.
S. 414 would amend the Consumer Credit Protection Act to ban abusive credit practices, enhance consumer disclosures and protect underage consumers.
During the committee’s consideration of the bill, the panel voted unanimously to adopt the Crapo-Corker Federal Deposit Insurance Corp. (FDIC) and NCUA Borrowing Authority amendment.
Offered by Republican Sens. Mike Crapo (Idaho) and Bob Corker (Tenn.), the amendment would increase NCUA’s authority to borrow from the U.S. Treasury to $6 billion from $100 million and the FDIC’s authority to $100 billion from $30 billion.
Equally significant, or perhaps even more so, the amendment would establish for NCUA an emergency borrowing authority of $18 billion—or three times the $6 billion that would be available during normal times.
While nowhere near the $30 billion requested by the agency, NCUA Chairman Michael Fryzel noted after the unanimous vote that the Crapo amendment represents the first time any language on NCUA emergency borrowing authority has appeared in this Congress.
Addressing another huge issue for credit unions, the amendment also would provide express authority for NCUA to spread out the impending premium assessment on credit unions over five years, which the NCUA feels it cannot do under current law.
Fryzel said the strong and accompanying discussion sent “a strong indication that the Senate wants to address the need for NCUA to have greater borrowing authority and have greater flexibility on premium assessments.”
He said he is encouraged for future action on the NCUA-drafted Corporate Credit Union Stabilization Fund legislation, which would allow credit unions to spread the cost of the National Credit Union Share Insurance Fund (NCUSIF) replenishment over as many as seven years.
The Credit Union National Association (CUNA) also called the amendment a significant step forward in providing credit unions relief from the immediate impact of the premium assessment to fund NCUA’s actions to stabilize the corporates. However, in letters to Crapo and Corker, CUNA President/CEO Dan Mica said CUNA would welcome an opportunity to discuss further legislative steps that cold be taken to address corporate credit union issues.
Also of interest to credit unions, the banking panel considered, then withdrew, an amendment to clarify that the bill does not expand the Federal Trade Commission’s mortgage-lending rulemaking powers to credit unions or other depository institutions. The amendment would also have specified that the bill does not increase state attorneys’ general authority to enforce the Truth-in-Lending Act, the amendment notes.
That amendment, backed by CUNA, was also co-offered by Crapo and Corker. On the Senate floor during debate on an omnibus spending bill, senators including Christopher Dodd (D-Conn.), Daniel Inouye (D-Hawaii) and Byron Dorgan (D-N.D.) promised the FTC issue would be addressed.
At the heart of S. 414 are provisions to crack down on abusive credit card practices.
CUNA supports efforts to end discriminatory, predatory, deceptive and abusive lending practices. Such efforts should be balanced, however, to avoid unintended consequences that ultimately would be adverse to consumers, including making credit more expensive and less available for consumers.
Learn to reassure members about CUs, help struggling members in down economy with Webinars
MADISON, Wis. - Learn how to reassure credit union members in the current economy by communicating strengths and the benefits of membership, and explore ways to help struggling members with their finances during several CUNA webinars featured during the second quarter of 2009.
In a time when the rest of the financial services industry is under intense scrutiny, learn how to proactively communicate the strengths of the credit union as well as reassure existing members and attract new ones during COMMUNICATING YOUR CREDIT UNION’S STRENGTHS. The April 9 webinar explores new ideas and initiatives for attracting members and how to clearly explain the benefits of membership. Attendees will also learn how to set clear expectations to elevate service standards and how to recognize success.
BEST PRACTICES FOR IMPLEMENTING A FINANCIAL COUNSELING PROGRAM helps credit unions set up a solid program for teaching members how to manage their finances in the current economy. During this April 15 webinar, step-by-step considerations for implementing a financial counseling program will be detailed. Attendees will also get tips and advice on the implementation process from three financial counselors who have all helped implement successful programs at their credit unions.
Finally, learn possible solutions and resources that can help struggling members meet their mortgage obligations and avoid foreclosure during FORECLOSURE PREVENTION: HOW CAN YOU HELP YOUR MEMBERS? During this April 16 webinar, attendees will also discover how to evaluate a member’s capacity for a sustainable solution. Retention and liquidation options will be studied, and resources for foreclosure prevention will be explored.
During a webinar, students hear and see a presentation, ask questions of the instructor, and refer to handouts. More than 30 webinars are scheduled during the second quarter of 2009 to educate busy credit union personnel about: finance and economics; human resources and training; security; lending and collections; management and leadership; marketing and business development; operations, sales, and service; and regulatory compliance. Archived versions of many recently-held webinars are also available.
For a complete list of classes or to register, visit training.cuna.org and select the “Webinars & eSchools” link, or call (800) 356 9655, ext. 4249.
Litigation efforts on hold, options explored: Mica
WASHINGTON (3/31/09)—The legal team at the Credit Union National Association (CUNA) has determined that a variety of options are available to seek answers from the National Credit Union Administration (NCUA) about its actions involving corporate credit unions, and CUNA said it would not file a legal challenge at this time.
CUNA President/CEO Dan Mica issued a statement that the association decided against challenging the NCUA’s appointment of conservators for U.S. Central FCU and Western Corporate FCU (WesCorp) because the 10-day timeframe for filing could force haste.
Mica said CUNA is committed to keeping as many options open as possible in obtaining answers for credit unions from NCUA about how it reached the conclusions it did for conserving U.S. Central and WesCorp – including through Congress, the regulatory process and the courts.
Mica said CUNA’s legal research has determined that other legal remedies are available that are likely to be more fruitful if CUNA decides to go to court.
In addition, he said, these other remedies are not subject to the 10-day deadline that applies to challenges to conservatorships. This would avoid pressure to make the kind of hasty legal decisions that would have been necessitated by a decision to file a case today, Mica said.
Mica emphasized that CUNA continues to believe there is much NCUA can do unilaterally to mitigate the financial impact of its Corporate Stabilization Program on natural person credit unions.
“We hope that a combination of initiatives by NCUA, plus legislation if possible, will make litigation unnecessary,” Mica said. “But that remains an avenue open to us.”
CUNA General Counsel Eric Richard said Monday that NCUA’s legislative proposal to create a stabilization fund goes a long way to address the problems facing the corporate credit union system, as well as allowing natural person credit unions to spread out premium payments over several years.
He said CUNA intends to work with the National Association of Federal Credit Unions to work to persuade the NCUA to expand its legislative proposal to include authority to allow the Central Liquidity Facility to lend money directly to corporate credit unions, and to raise NCUA’s borrowing authority above the $6 billion the agency has requested.
Flexible accounting stance may come from NCUA
WASHINGTON (3/30/09)—If an accountant is willing to be flexible about when a credit union books the cost of their 1% premium being assessed to replenish the National Credit Union Share Insurance Fund (NCUSIF), the Natoinal Credit Union Administration (NCUA) said it will be okay with that.
A senior NCUA staff member told the Credit Union National Association that the agency will not necessarily challenge a decision of a credit union’s CPA or auditor to take into consideration a recent legislative proposal by the NCUA when making an accounting decision about when to book the replenishment.
The NCUA declared a premium would be collected from natural person credit unions later this year to cover the cost to the NCUSIF of the agency’s actions to stabilize corporate credit unions liquidity.
The agency announced Thursday that it has drafted legislation to allow credit unions to spread the cost of the replenishment over as many as seven years. However, it will take an act of Congress to authorize the longer time frame.
Addressing the uncertain situation faced by credit unions, the NCUA staff member made the following points:
• NCUA does not set accounting rules;
• Based on what AICPA put out recently, credit unions can book their costs in 2008 or 2009;
• For credit unions that choose to book in this year, the NCUA already has advised that the 1% deposit replenishment must be booked by March 31;
• The premium will be assessed later in the year, likely September, and should be booked then; and
• The legislation being sought by the NCUA is not a certainly and therefore should not affect the March 31 statements.
Most important, NCUA said that if a credit union’s CPA or auditor approves taking the legislation into consideration in deciding whether the 1% replenishment must be recognized by March 31st, NCUA will not necessarily challenge it.
NCUA starts stakeholder reports on corporate CUs
ALEXANDRIA, Va. (3/30/09)--The National Credit Union Administration (NCUA) Friday began what it said would be periodic reporting to stakeholders on the status of the corporate credit union system.
In its inaugural communication, the agency said normal operations and transactions have continued uninterrupted and liquidity remains stable at f U.S. Central FCU (U.S. Central) and Western Corporate FCU (WesCorp), after being placed in conservatorships last Friday.
The update recapped the agency’s recent actions, such as the release of the two corporates’ boards of directors, CEOs, and one senior staff member have been released.
It also said cross analysis of the value of held securities continues and that the release of specific comparisons can be expected soon.
NCUA Chairman Michael Fryzel defended his agency’s action to place U.S. Central and WesCorp under conservatorships, an action that has been questioned as unnecessary by some.
“(T)he cost of the corporate credit union stabilization program would have increased even if NCUA had not placed U.S. Central and WesCorp into conservatorship.
“Barring a deepening of the recession beyond what was incorporated into the loss projections, and economic uncertainties do remain, the $5.9 billion reserve should be sufficient to cover expected credit losses of holding the distressed assets to maturity,” Fryzel said in the release.
Highlighting another point of controversy, Fryzel said that while analysis by Pacific Investment Management Company LLC (PIMCO) was one factor in arriving at this reserve, it served to refine and supplement NCUA’s own calculations.
Fryzel stated that NCUA selected PIMCO partly because it had not sold any of the bonds being analyzed and was not engaged in providing any other services to corporate credit unions.
Fryzel noted that any firm with expertise to evaluate the bonds is a potential purchaser. However, he said there is not conflict of interest in PIMCO’s involvement because the NCUA intend to hold the securities to maturity, an action the chairman said was recommended by PIMCO.
The Credit Union National Association (CUNA) has urged the NCUA to make public more information on PIMCO and any analysis that lead to the agency’s actions to conserve two corporate credit unions last week.
NCUA’s Corporate Stabilization Plan
CUNA Threatens NCUA With Legal Action Over Corporate Takeovers
Credit Union Journal | Friday, March 27, 2009
WASHINGTON – CUNA, which played a lead role in governing U.S. Central FCU, said it would seek congressional hearings, appeal to the Obama administration or even launch a legal challenge of last week’s conservatorships of U.S. Central and WesCorp FCU unless NCUA is forthcoming with the controversial consultant’s report that prompted the unprecedented regulatory actions.
In a letter to each of the three NCUA Board members made public yesterday, CUNA President Dan Mica insisted that the credit union regulator make public the report by Pimco, a 4,500-page analysis of every bond in the corporate credit union system, which was used as the basis for last Friday’s takeovers of the two corporate giants.
The takeovers of the two failed corporates are projected to cost all credit unions at least $2.2 billion, with another $3.7 billion cost set aside to guarantee all corporate deposits–a total of $5.9 billion for the corporate bailout.
CUNA had a significant role in the governance of U.S. Central, with two representatives on the seven-member board of the $34 billion corporate. One of the directors was CUNA’s chief operating officer, while the other was a representative of the CUNA-affiliated American Association of CU Leagues. Another CUNA affiliate, the Association of Corporate CUs, is also the chief lobbying arm of the corporates.
Over the last two days CUNA has flooded NCUA with form letters and emails it asked credit unions to send to the regulator, insisting that the agency make public the Pimco report. The messages have been so numerous they have succeeded in crashing the email system of one of the three NCUA Board members. CUNA directed its credit union members yesterday in an action alert to “Email each of the NCUA Board Members TODAY and urge them to approve a mechanism to spread out the costs and direct their staff to provide much more information to the credit union system from the Pimco report.”
“Every single credit union in the nation that has had an opportunity to weigh in has expressed concern, outrage, anger, and frustration with the current situation,” said Mica in his letter.
“I truly believe that we can address this issue quickly and successfully in a discussion with you and our staffs operating in good faith,” said Mica to the federal regulators. “I do not think it would be in anyone’s best interest to do otherwise.”
Mica insisted that NCUA respond by the close of business on Friday.
The NCUA Board has been reluctant to make the Pimco report public because of what it sees as proprietary information. NCUA did say yesterday the report cost the agency $4.5 million.
NCUA hired Pimco, one of the experts on bond valuation, after U.S. Central reported a huge $1.1 billion loss for 2008, necessitating a $1 billion cash infusion from NCUA. NCUA stepped in last week after the Pimco report indicated that billions of dollars more of losses are expected to accrue on the books of U.S. Central, as well as WesCorp. WesCorp was preparing year-end financials that would have shown a loss of $740 million, after it told its members last month that net income for 2008 was $57.8 million.
CUNA knows that any challenge of the NCUA conservatorships faces an uphill battle, having gone through similar circumstances after the 1995 NCUA takeover of Capital Corporate FCU, the Washington-area corporate known as CapCorp. Laws passed after the S&L crisis made it difficult to challenge federal conservatorships after S&L lobby groups had exercised significant influence in stalling the takeover of failed thrifts at the cost of billions of dollars extra in taxpayer bailout funds.
NCUA Proposes New Fund For Corporate Bailout
Credit Union Journal | Thursday, March 26, 2009
ALEXANDRIA, Va. – The NCUA Board this afternoon proposed a new vehicle that would segregate the costs and expenses related to the corporate bailout from the National CU Share Insurance Fund and help the federal regulator stretch out the $5.9 billion cost to as long as seven years.
The so-called Corporate Stabilization Fund, which will require approval by Congress, would be authorized to borrow up to $6 billion from U.S. Treasury on a revolving basis.
The fund would last for seven years after, which NCUA would have to shut it down.
The Stabilization Fund would be required to repay the Treasury, with interest, all amounts borrowed, but the Fund has discretion as to the timing of each repayment and the amount of principal included with each repayment. The Fund would make assessments on federally-insured credit unions as it determined necessary to make each repayment.
New ad assures members their funds are insured
NCUA has released a new ad assuring credit unions members that their accounts are safely insured. 
In the ad, well-known financial journalist Jane Bryant Quinn says, “A lot of people worry about their money today but you don’t have to worry about your credit union account” because they are federally insured up to $250,000.
She concludes, “It means you can sleep at night.”
To see the video on YouTube, click here.
Credit unions and state league organizations are free to use and distribute the Jane Bryant Quinn 30 second video advertisement about NCUA insurance protection.
NCUA has purchased airtime in several markets. In response to credit union trade association requests, NCUA is alerting all credit union organizations to feel free to utilize the high definition video (HD) advertisement. Credit unions and leagues can use the video and buy local media advertising space that targets your members, local area or state.
A standard and high definition (HD) video are available online from NCUA’s Web site.
Also, visit the NCUA Web site for a Share Insurance Tool Kit that includes logos, FAQs and other helpful information.
NCUA to consider corporate CU issues Thursday
ALEXANDRIA, Va (3/24/09)—A special closed meeting has been called for Thursday morning by the National Credit Union Administration (NCUA)to look at possible plans to spread out the cost to natural person credit unions of the agency’s corporate credit union stabilization efforts.
The Credit Union National Association (CUNA) has been strongly advocating such action.
An agenda states matters to be considered are:
• Consideration of supervisory activities. Closed pursuant to Exemptions (9)(A)(ii) and (B); and
• Consideration of Proposed Legislation. Closed pursuant to Exemptions (9)(A)(ii) and (B).
The agency made clear that the items address corporate credit unions and actions taken to stabilize the liquidity in the corporate system.
CUNA, through its Corporate CU Task Force, has been exploring options to mitigate the cost to natural person credit unions of the NCUA’s recent actions regarding the corporates. CUNA staff also has been pressing this point with the agency, as recently as at a meeting yesterday morning that CUNA initiated with NCUA Executive Director David Marquis, Examination and Insurance Director Melinda Love, and Central Liquidity Facility President Owen Cole.
At that meeting CUNA General Counsel Eric Richard, Deputy General Counsel Mary Dunn and Chief Economist Bill Hampel urged the NCUA to go to Congress immediately to seek assistance in mitigating the costs of its action to credit unions by spreading out the costs over several years.
Senior regulatory staff of the National Association of Federal Credit Unions also were in attendance.
The agency also indicated it plans to approach the U.S. Treasury Department to see how credit unions may fit into the public-private asset acquisition plan announced yesterday by Treasury Secretary Timothy Geithner. That is also in line with what CUNA has recommended to NCUA.
On Friday, the agency announced it had places two of the corporates—U.S. Central FCU and Western Corporate FCU (Wescorp)—into conservatorship.
Also, in January the NCUA announced a three-pronged initiative to bolster and enhance the liquidity positions of the corporates. The agency declared a premium assessment to restore the National Credit Union Share Insurance Fund (NCUSIF) equity ratio to 1.30%, and announced the premium would be collected in 2009.
During a webinar on corporate credit union issues Monday, NCUA Executive Director David Marquis said the agency “remains committed” to finding a way to mitigate the costs.
NCUA Chairman Michael Fryzel concurrently announced he had directed NCUA staff to explore two new avenues to augment NCUA’s Corporate Stabilization efforts.
First, Fryzel said, the NCUA has held preliminary discussions with federal lawmakers regarding the creation of a “corporate Stabilization mechanism”, as an adjunct to the National Credit Union Share Insurance Fund (NCUSIF).
The new mechanism would replenish the NCUSIF through an arrangement with the U.S. Treasury Department, while providing additional flexibility for credit unions to make their required contributions over a period of time, Fryzel said. Details of the proposal will be available pending the Board’s review and decision at Thursday’s closed meeting.
The second NCUA action is to evaluate the latest Treasury initiative to deal with troubled assets—the program announced Monday. The new ‘Public-Private Investment Program,’ Fryzel said, “appears to hold some promise for corporate credit union holdings.”
NCUA Releases FAQs on PIMCO Credit Analysis and Recent Conservatorship Actions
Alexandria, Va. March 23, 2009—The National Credit Union Administration (NCUA) today is releasing frequently asked questions (FAQs) regarding the Pacific Investment Management Company LLC (PIMCO) analysis of corporate credit union residential mortgage backed securities (RMBS) and NCUA’s conservatorship of U.S. Central and Western Corporate Federal Credit Unions.
The NCUA Board requested PIMCO perform an analysis of corporate credit union RMBS in order to receive an independent, objective assessment of potential losses resulting from holding the securities to maturity and to verify NCUA’s reserve methodology for calculating the credit union premium to recapitalize the National Credit Union Share Insurance Fund.
NCUA obtained an independent review because:
* The portfolios with RMBS have highly complex structures that require considerable expertise to model and analyze.
* The growing amount of unrealized losses on investment securities and the troubling amount of rating downgrades compelled NCUA to independently determine the amount of expected credit impairment.
* NCUA developed concerns about the portfolio management abilities of the largest corporate credit unions and did not want to rely solely on the institutions’ own analyses.
The attached PIMCO action FAQs explain that taken together with other supervision and examination information, the PIMCO report augments National Credit Union Share Insurance Fund analysis of the potential losses stemming from corporate credit union portfolios.
The attached FAQs relating to NCUA’s conservatorship of US Central and Western Corporate explain why NCUA conserved the corporate credit unions and provide a wide range of information about their liquidity, what credit unions can do to support stabilizations efforts, TARP funding, and the future structure of corporate credit unions.
The National Credit Union Administration charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, operates and manages the National Credit Union Share Insurance Fund, insuring the accounts of nearly 89 million account holders in all federal credit unions and the majority of state-chartered credit unions. NCUA is funded by credit unions, not federal tax dollars.
Story puts CU crisis in perspective for consumers
A national story on NCUA and the conservatorships on CNN Money blog puts the current situation with corporate credit unions in proper perspective for consumers:
Credit union members: Don’t panic
Posted by Ismat Sarah Mangla
March 23, 2009 11:29 am
We’ve said it before and we’ll say it again: Credit unions often offer some of the best deals in banking. But on Friday night, federal regulators seized two corporate credit unions with assets totaling $57 billion. So what does that mean for the sterling rep credit unions have managed to build?
The two institutions put into conservatorship, US Central Federal Credit Union in Lenexa, Kansas, and Western Corporate Federal Credit Union in San Dimas, California, did not actually serve consumers directly. Rather, they acted as clearinghouses, offering loans and other services to retail credit unions. According to the National Credit Union Administration, the federal body that overseas credit unions, both US Central and Western Corporate held “an unacceptably high concentration of risk” and federal seizure was required “to protect retail credit union deposits.” NCUA says that despite the seizure, both will continue offering services.
Make sure your credit union features the NCUA logo on its web site and at the branch.
If you’re one of the 90 million credit union members nationwide, don’t panic in the face of this news. You deposits are safe. The NCUA, like the Federal Deposit Insurance Corporation, insures all credit union deposits, usually up to $100,000. And, like the FDIC, the NCUA increased its coverage to $250,000 until December 31, 2009. Just make sure that you see the NCUA logo pictured here on your credit union’s web site. If you’re unsure whether your credit union is a member (98% of them are), NCUA’s web site offers a tool that helps you check. You should also use the Electronic Share Insurance Calculator to make sure all your credit union deposits are covered. (Just like FDIC insurance, deposits at any one institution exceeding $250,000 are not covered unless those accounts fall in different ownership categories. Doublecheck yours with ESIC.)
Bottom line: You’re still going to find low fees and good deals at credit unions. As long as your institution is federally insured and your deposits fall below the insured limits, you can rest easy.
CBS interviews NCUA
Keith Morton and John Kutchey with the National Credit Union Administration (NCUA) conducted an interview this afternoon here at U.S. Central with CBS Radio News’ Barry Bagnato. Barry is in the area working on a broad array of stories concerning the recession, and his discussion with Keith and John focused on the NCUA’s decision to conserve U.S. Central and the resulting impact on the credit union network.
Barry’s questions focused on why the conservatorship was necessary, the impact of assessments on natural-person credit unions to replenish the
National Credit Union Share Insurance Fund (NCUSIF), the ANPR and the NCUA’s Corporate Stabilization Plan, what happened to place U.S. Central
in this position and the possibilities other corporate credit unions could face conservatorship.
Keith and John noted that the recession and plummeting home values across the nation adversely affected the value of mortgage-backed
securities in U.S. Central’s portfolio, securities that were highly rated when U.S. Central purchased them. They emphasized that consumers
will see little if any change as the result of the NCUA’s action last week and noted that deposit guarantees remain in place for credit unions
as they do for banks. In terms of impact on natural-person credit unions, Keith and John said credit unions remain well capitalized, with
some actually experiencing loan and asset growth at a time most financial institutions are struggling. They added that less than 1% of
credit unions would face solvency issues based on the special assessment.
Keith and John stated that the conservatorship of U.S. Central is open-ended at this time and reiterated the preference for U.S. Central
to hold onto performing securities until they mature. Finally, Keith and John indicated that they do not foresee, at this time, the need to take
similar action anywhere else within the Corporate Credit Union Network.
Radio affiliates of CBS News likely will use portions of the interview on newscasts tomorrow morning across the nation, and the entire
15-minute interview will be sent on CBS’ news feed for affiliates to use as they wish.
U.S. Central Credit Union may form "bad bank": CEO
By Carey Gillam
KANSAS CITY (Reuters) - Two days after regulators seized the largest U.S. corporate credit union, the newly installed CEO said he is considering a variety of options, including setting up a “bad bank,” to handle a mixture of troubled mortgage assets.
Several options are on the table at the $34 billion-asset U.S. Central Federal Credit Union, said new CEO James Nance, who quit as chief administrative officer at Icap Capital Markets Llc in New Jersey to helm the Lenexa, Kansas-based institution at the request of regulators.
In addition to setting up a separate entity, a so-called “bad bank,” to take toxic assets off the books of U.S. Central, Nance told Reuters in an interview that he will look at options for securitizing the troubled assets in ways that would allow for them to be held for an extended periods, and he will explore the sale of certain assets to non-credit union buyers.
“We want to try to avoid having the situation deteriorate,” said Nance, who prior to his work at Icap, oversaw asset and liability management at U.S. Central from 1993-1996.
U.S. Central is the largest of two U.S. corporate credit unions taken over on Friday. The National Credit Union Administration (NCUA) also took control of Western Corporate (WesCorp) Federal Credit Union of San Dimas, California, which has about $23 billion in assets. NCUA said the two had expected credit losses greater than total capital.
The institutions provide liquidity and settlement services tapped by more than 90 percent of the nation’s nearly 8,000 credit unions, which are member-owned.
Regulators said that U.S. Central’s problems stemmed in part from its investments in “private label” mortgage-backed securities and collateralized mortgage obligations. The instruments earn higher yields but do not have implicit government guarantees.
Although U.S. Central officials said the bulk of the securities continue to pay off as expected, and more than 70 percent held highly favorable AA or AAA ratings as recently as 2007, accounting rules forced them to write down the value of those securities dramatically as home values plummeted around the nation.
NCUA officials would not disclose a specific loss figure for U.S. Central. But in January the NCUA injected $1 billion into the institution.
Nance said some of the problem assets were viewed as having temporary losses, while another batch were seen as beyond recovery.
“Some of the losses on those are not going to come back even if the market does,” he said.
If U.S. Central’s problems were left unchecked, credit unions across the country could have seen a disruption in their access to funds.
Both Nance and NCUA officials have stressed that the credit union industry remains extremely well capitalized and will not likely need to turn to taxpayers for a bailout.
“Credit unions are going to handle this problem on their own without having to turn outside,” Nance said.
The troubles emerging in the credit union industry come after the sector has been touted in recent months as a source of strength and continued credit for consumers and businesses as their banking brethren stumble.
But a NCUA risk analysis completed this month put potential credit losses throughout the credit union system as high as $16 billion, “with a most reasonable estimate in the current environment of $10.8 billion.”
The needs of the reserve fund that backs credit unions had risen sharply to an estimated $5.9 billion from $4.7 billion, officials said.
“Given the enormous size and complexity of this crisis that the world’s major economies are going through, it would have been extraordinary for credit unions to have escaped unscathed,” said Nance. “Nobody should be shocked and amazed. This crisis is bigger than people really think it is. It is far reaching and transformative.”
(Reporting by Carey Gillam; editing by Richard Chang)
NCUA places U.S. Central and Western Corporate (WesCorp) in Conservatorship
The National Credit Union Administration Board announced late Friday that is has placed U.S. Central Federal Credit Union, Lenexa, Kansas, and Western Corporate (WesCorp) Federal Credit Union, San Dimas, California, into conservatorship to stabilize the corporate credit union system and resolve balance sheet issues.
This is the latest NCUA effort under the Corporate Stabilization Plan, and the action is allowed under the Federal Credit Union Act.
The two corporate credit unions were placed into conservatorship to protect retail credit union deposits and the interest of the National Credit Union Share Insurance Fund (NCUSIF). Service continues uninterrupted at both U.S. Central Corporate Federal Credit Union and WesCorp, and members are free to make deposits and access funds. The member accounts of both credit unions are guaranteed under provisions of the previously announced NCUA Share Guarantee Program, through December 31, 2010. The Program extends NCUSIF coverage to all funds held by the two corporate credit unions.
The NCUA action has hit the national media. The Credit Union Association of New Mexico wanted to provide you with talking points and information immediately in case you have member or media questions over the weekend. We want to help consumers understand their credit unions are strong and members’ money is safe at a credit union.
Talking points are posted at the end of this story.
The National Credit Union Administration is hosting a Webcast today (Monday, March 23) at noon MST, to provide the credit union community with an update on the corporate credit union stabilization program. Here are the details:
This webcast will include a discussion of recent events as well as provide an update on the NCUSIF reserve liability. The speakers for the webcast include NCUA Executive Director David Marquis and E & I Director Melinda Love.
Duration: 2 hours
How to Register
Participants can register for the webcast until 1:45 PM EST, 11:45 AM MST on Monday, March 23. To register for the webcast, click on the following link:
http://event.on24.com/r.htm?e=135750&s=1&k=952D61AF86486F16EE74FF144CBB336E
Participants will be asked to enter their first name, last name, organization, and email address. Once registered, participants will use this same link to access the webcast. Prior to the start of the webcast, participants should:
• Make sure their volume is turned on,
• Permit pop-ups from the website, and
• Make sure their screen resolution is set to 1024 x 768.
NCUA will archive this webcast and make it available at http://www.NCUA.gov for future viewing. This archive should be available within the next two weeks.
Submitting Questions to Webinar
Participants will be able to submit questions throughout the webcast via the Internet. Instructions will be provided at the beginning of the webcast. The presenters will address as many of the questions as possible.
QUESTIONS:
Contact CUANM Vice President of Governmental Affairs Juan Fernandez, juan@cuanm.org, 505-298-9899 or 1-800-366-6628 ext. 2233, 518-698-7842 (mobile).
National Credit Union Administration (NCUA) Corporate Credit Union Plan
Member & Media Responses
Four key points about credit unions:
• The overall credit union system is healthy and sound.
• Consumers can be assured their money is safe in their credit union.
• The action taken by the federal agency has no impact on the ability of credit unions to continue
serving their members. Credit unions can and will continue lending. Credit unions offer a safe
place for their members’ savings, and provide scores of additional services to their members at no or low-cost.
• The National Credit Union Administration action involves no taxpayer dollars.
Additional details to help your credit union respond to credit union members and
members of the media:
The credit union system overall is healthy and sound;
Consumers’ money is safe in a credit union.
• Regular or everyday credit unions (“natural person”), the ones where 92 million Americans save and borrow, are well capitalized and strong (nearly 11% capital to assets).
• Credit unions are still actively extending credit and keeping the country’s lending wheels in motion when many other financial institutions have cut back.
• Credit unions are lending responsibly. Credit unions typically hold onto their loans.
• Deposits at all New Mexico credit unions are federally insured to $250,000, the same as at FDIC protected banks and with the same federal guarantee. The insurance fund protecting consumer savings (the National Credit Union Share Insurance Fund) is backed by the full faith and credit of the United States.
Some everyday (“regular”) credit unions, are feeling the strain from what is now seen as the worst financial crisis to grip the nation since the Great Depression.
• The steep decline in the economy is having its impact. At year’s end, the delinquency ratio among credit unions was about 1.43%—well above the typical ratio of about 0.96% in the first seven months of 2008.
• In hard-hit states like CA, NV, AZ, FL, credit unions are experiencing particular “collateral damage” stemming from the economic crisis in those states (i.e. members with job losses or other life changes related to the economic downturn fall behind on carefully made loans).
• A small number of credit unions have closed or taken into conservatorship (16 out of 8,300) and there will likely be more. But credit unions overall are in strong shape and will weather this financial storm. There is no problem that can’t be handled by our existing deposit insurance system.
• No one has ever lost a penny of federally insured deposits in a credit union.
The 28 “corporate” credit unions – where everyday credit unions invest – deal with large sums of money. Because they operate in the open securities markets, the credit crunch in those markets affects corporate credit unions.
• The Wall Street Journal pointed out in its Jan. 29, 2009 edition (page 1) how corporate credit unions provide financing, check-clearing and other tasks for regular credit unions. These “wholesale” credit unions are owned by regular credit unions – which are members of the corporate credit unions.
• Corporate credit unions hold mortgage backed securities that generally are still performing and are “higher up the food chain” than those held by Wall Street banks that experienced so many troubles in the fall of 2008.
• Under fair value accounting rules, these securities have still lost value in today’s frozen-up financial markets.
• The majority of these securities give every indication of continuing to pay interest and principal until they mature.
• Further, corporate credit unions are facing keen competition for deposits from an increasing number of other institutions which have received guarantees from the U.S. government, such as through the Troubled Asset Relief Program, or TARP.
The Corporate Credit Union Plan announced by credit unions’ federal regulatory agency, the National Credit Union Administration (NCUA), is designed give credit unions – which are members and sole users of corporate credit unions – continued confidence in the wholesale institutions.
• NCUA has pointed out “the capital position of natural person credit unions remains a constant
source of strength of the industry.”
• However, NCUA has also stated, “the corporate credit union system is now facing unprecedented strains on its liquidity and capital due to credit market disruptions and the current economic climate.”
• NCUA’s action is intended to add stability to and strengthen corporate credit unions utilizing a three-pronged approach designed to: maintain liquidity, strengthen capital and restructure the corporate system.
• No taxpayer dollars are being used for the corporate credit unions. It is only credit union money paid into the National Credit Union Share Insurance Fund (NCUSIF) – the insurance fund that is completely funded by credit unions to assist in this type of situation.
Most importantly - credit unions are well-positioned to weather the economic storm.
Safe Havens: Credit Unions Earn Some Interest from WSJ
The Wall Street Journal ran a very favorable story about credit unions as a safe haven for consumers Sunday, March 15, and it was carried online and in many local and regional newspapers. CUNA and the California/Nevada league both worked extensively with the reporter who wrote the story. Here is an excerpt. To read the full story go to the WSJ Web site.
By JONNELLE MARTE
Cash isn’t exactly flowing like it used to. The stock market can’t find a bottom. Big banks have become wards of the government while smaller banks are failing at a rate of about one a week. Savers worry about the institutions where their cash is parked, while people who need to borrow scramble to find willing lenders.
Buffeted in every direction by the continuing financial Katrina, more and more savers and borrowers are finding a safe harbor in the sleepiest, most unexciting corner of the financial world: credit unions. Often, it’s right in their office, maybe a couple of floors down or at the end of the hall.
Long a haven for cash-strapped workers, car buyers and Christmas-club savers, the nation’s 8,000 credit unions are gaining new stature as reliable sources of lending in the tempest-tossed credit market.
Seeking Savers and Borrowers
They’ve also wooed consumers by offering a win-win combination of generally higher interest rates for savings accounts and lower rates for loans, when compared to most banks.
Typical spreads: Right now, a one-year certificate of deposit at a credit union pays about 2.29% versus 1.74% at a commercial bank, according to Datatrac, a financial research firm that analyzes interest rates for banks and credit unions. A home-equity line of credit at a credit union charges an average of 4.41% compared to 4.77% for banks—but banks charge slightly less for a 30-year fixed-rate mortgage with a 5.33% rate, compared with the 5.39% charged by credit unions.
Membership in credit unions rose to almost 90 million in 2008, from 85 million in 2004. And the loans on their books topped $575 billion in 2008, up from $539 billion in 2007. By comparison, 8,300 U.S. banks saw loans outstanding decrease $31 billion last year, to $7.876 trillion from $7.907 trillion in 2007.
'30 Under 30' reports young adult financial habits
MADISON, Wis. (3/12/09)--The report of Filene Research Institute’s ‘30 Under 30’ group about young adult financial habits and needs is now available.
Because credit unions need to attract younger members, professionals and volunteers, Filene created the “30 Under 30” group to focus on research regarding young adult financial habits and needs.
The group’s final report is “10 Young Adult Innovations: From the 30 Under 30 Group,” edited by Filene’s driver of the CU Tomorrow project, Ben Rogers.
The research, funded in part by PSCU Financial Services, Credit Union Executives Society, Fiserv, and the Corporate Credit Union Network, highlights 10 business plans that align facets of young adult life with credit union needs.
The business plans fall into three categories.
“Plans for Younger Members” has the following features:
Change Your Savings: Harnesses the power of debit to fund worthy goals;
CUre Card: Members improve their communities with a credit union debit card;
GrassHopper: Life planning meets credit union products;
Mortgage Down Payment Accelerator: Rewards those who are saving for a home;
Win-Win Savings: Prize-based savings for young adults; and
What’s Next? A responsible way to build credit and save.
“Plans for Talented Young Professionals” has:
Shared Staffing: Short-term sabbaticals for professional development;
Gen Y Fast Track: Mentorships and job rotation for superior retention; and
iAdvanceCU.com: Credit union career paths and improved recruiting.
“A Plan for Younger Volunteers” features a “Member Advisory Panel (MAP): Connecting young adult volunteers with credit union leaders.”
Each business plan details the product’s overall aim, outlines its benefits for the member and the credit union, explains how to put the product into practice at a credit union, and shows what further considerations apply to each.
“The aging of credit union membership is a challenge for the credit union system,” Rogers said.
“Engaging ambitious young professionals and giving them enough room to improve and innovate is essential for credit union success over the next 10 years.”
Are any of your members eligible for EITC?
Earned Income Tax Credit could help your members lower taxes, claim refund
The Earned Income Tax Credit (EITC) is a tax credit for people who work but do not earn high incomes. The EITC is a valuable tool helping eligible taxpayers to lower their taxes or to claim a refund. The IRS wants all eligible taxpayers to claim this credit.
Read more.
Schumer announces new plan to tap CUs to jumpstart small business lending
Senator Proposes Fixing Little-Known 1998 Law By Eliminating the Statutory Cap On Small Business Loans Made By Credit Unions
Right Now, Credit Unions Can Only Lend Up to 12.25% of Total Assets to Small Businesses; Credit Unions Say $10B Worth Of Loans Could Be Made If Cap Is Lifted
With Big Banks Pulling Credit Lines To Small Businesses Amid Economic Crisis, Schumer Says Credit Unions Are Well-Positioned To Come To The Rescue
WASHINGTON, DC—With the ongoing economic crisis choking off the flow of credit to U.S. small businesses, U.S. Senator Charles E. Schumer (D-NY) announced a new proposal today that would tap credit unions to jumpstart lending to these businesses by $10 billion in the coming year.
Schumer said he plans to introduce legislation that would eliminate a statutory limit on the volume of business loans that can be made by the country’s 8,000 credit unions. Under a 1998 law, credit unions can lend to small businesses at just 12.25 percent of their total assets. Prior to the 1998 bill, no cap on small business lending existed; Schumer’s bill would eliminate the cap in its entirety once again.
The Credit Union National Association (CUNA) estimates that credit unions can loan $10 billion to small businesses in the first year after cap is lifted.
“Our focus must be on increasing the lending to small businesses, which are the lifeblood of our economy. They have not only been a casualty of the ongoing credit crisis, but have unduly felt its impact.” Schumer said. “The situation facing these businesses right now is much worse than a matter of them simply being denied new loans. They are being strangled by having existing lines of credit pulled. A threat like this to small businesses could upend the livelihood of millions of workers and be catastrophic for the larger economy.”
According to data provided by the Small Business Committee, the volume of loans guaranteed by the Small Business Administration is down more than 60 percent compared to this time last year. In the current environment, it is not only hard for small businesses to obtain initial credit, but it is also proving very difficult to maintain lines of credit they already have. Many businesses are now relying heavily on credit cards, which often have unfavorable terms. According to a January 2009 survey by the National Small Business Association, 70 percent of small business owners say they have seen the terms of the credit cards worsen.
With so many large banks in bad shape, credit unions are becoming increasingly important, especially with regard to small businesses that need relatively small lines of credit. lending institutions in the markets. Due in large part to the fact that they are not-for-profit, membership-based institutions, credit unions have not been exposed to the same losses that major banks have seen in their lending and investment operations.
Credit unions also have a long track record of scrutinizing borrowers, and low delinquencies as a result. Because deposits have been on the rise as people move their savings from the stock market to savings accounts, they have cash on hand to loan to small businesses.
There are over 8,000 credit unions in the U.S. With online banking, credit unions are available to just about any small business anywhere. And with an average loan size of about $200,000, credit unions are suited to small business lending. An estimated 27 percent of credit unions currently make small business loans.
The regulator for these institutions already has a policy in place that gives them the ability to provide oversight over their lending mix. Schumer’s bill will also require a semi-annual report to be provided to Congress twice a year on small business lending and loan delinquencies so that Congress can monitor the impact of the cap elimination.
This is just the latest relief measure pushed by Schumer. In November, the SBA heeded a call by Schumer and Sen. John Kerry to allow approved lenders to use a variable interest rate instead of the prime rate, and allow securities to be formed from SBA-backed loans of varying rates. Then, in the economic recovery package passed last month, Schumer and Kerry successfully fought to include $375 million to go towards eliminating onerous fees attached to SBA loans and $30 million for the SBA’s microloan program.
Schumer announces new plan to tap CUs to jumpstart small business lending
Senator Proposes Fixing Little-Known 1998 Law By Eliminating the Statutory Cap On Small Business Loans Made By Credit Unions
Right Now, Credit Unions Can Only Lend Up to 12.25% of Total Assets to Small Businesses; Credit Unions Say $10B Worth Of Loans Could Be Made If Cap Is Lifted
With Big Banks Pulling Credit Lines To Small Businesses Amid Economic Crisis, Schumer Says Credit Unions Are Well-Positioned To Come To The Rescue
WASHINGTON, DC—With the ongoing economic crisis choking off the flow of credit to U.S. small businesses, U.S. Senator Charles E. Schumer (D-NY) announced a new proposal today that would tap credit unions to jumpstart lending to these businesses by $10 billion in the coming year.
Schumer said he plans to introduce legislation that would eliminate a statutory limit on the volume of business loans that can be made by the country’s 8,000 credit unions. Under a 1998 law, credit unions can lend to small businesses at just 12.25 percent of their total assets. Prior to the 1998 bill, no cap on small business lending existed; Schumer’s bill would eliminate the cap in its entirety once again.
The Credit Union National Association (CUNA) estimates that credit unions can loan $10 billion to small businesses in the first year after cap is lifted.
“Our focus must be on increasing the lending to small businesses, which are the lifeblood of our economy. They have not only been a casualty of the ongoing credit crisis, but have unduly felt its impact.” Schumer said. “The situation facing these businesses right now is much worse than a matter of them simply being denied new loans. They are being strangled by having existing lines of credit pulled. A threat like this to small businesses could upend the livelihood of millions of workers and be catastrophic for the larger economy.”
According to data provided by the Small Business Committee, the volume of loans guaranteed by the Small Business Administration is down more than 60 percent compared to this time last year. In the current environment, it is not only hard for small businesses to obtain initial credit, but it is also proving very difficult to maintain lines of credit they already have. Many businesses are now relying heavily on credit cards, which often have unfavorable terms. According to a January 2009 survey by the National Small Business Association, 70 percent of small business owners say they have seen the terms of the credit cards worsen.
With so many large banks in bad shape, credit unions are becoming increasingly important, especially with regard to small businesses that need relatively small lines of credit. lending institutions in the markets. Due in large part to the fact that they are not-for-profit, membership-based institutions, credit unions have not been exposed to the same losses that major banks have seen in their lending and investment operations.
Credit unions also have a long track record of scrutinizing borrowers, and low delinquencies as a result. Because deposits have been on the rise as people move their savings from the stock market to savings accounts, they have cash on hand to loan to small businesses.
There are over 8,000 credit unions in the U.S. With online banking, credit unions are available to just about any small business anywhere. And with an average loan size of about $200,000, credit unions are suited to small business lending. An estimated 27 percent of credit unions currently make small business loans.
The regulator for these institutions already has a policy in place that gives them the ability to provide oversight over their lending mix. Schumer’s bill will also require a semi-annual report to be provided to Congress twice a year on small business lending and loan delinquencies so that Congress can monitor the impact of the cap elimination.
This is just the latest relief measure pushed by Schumer. In November, the SBA heeded a call by Schumer and Sen. John Kerry to allow approved lenders to use a variable interest rate instead of the prime rate, and allow securities to be formed from SBA-backed loans of varying rates. Then, in the economic recovery package passed last month, Schumer and Kerry successfully fought to include $375 million to go towards eliminating onerous fees attached to SBA loans and $30 million for the SBA’s microloan program.
Sen Schumer Proposes More Business Lending For Credit Unions
[ Dow Jones & Company, Inc. · 2009-03-05 ]
By Jilian Mincer, OF DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--New York Sen. Charles Schumer notified his colleagues Thursday that he plans to introduce legislation that would enable credit unions to increase their business lending.
The senator, a Democrat, said in a letter released Thursday morning that he plans to introduce legislation that lifts the cap on how much credit unions could lend to businesses. The proposal comes in response to an article that ran earlier this week in the Wall Street Journal on credit union business lending.
“Our focus must be on increasing the lending to small businesses, which are the lifeblood of our economy,” said Schumer. “The situation facing these businesses right now is much worse than a matter of them simply being denied new loans. They are being strangled by having existing lines of credit pulled.”
Schumer said in the letter that lifting the current cap would “help credit unions fill the gaping void in small business lending during this credit crisis.” His bill would require regulators to report twice a year to Congress on the “small business lending and delinquency so that Congress can monitor the impact of the cap elimination.” The senator has proposed several other relief proposals for small businesses.
“We believe given the urgency of the situation facing small businesses, there should be a good level of support,” said Schumer, who is a member of the Senate Finance Committee and the Senate Banking Committee.
About 27% of the 8,147 credit unions in the U.S. offer business loans, according to the Credit Union National Association, a trade group based in Washington, D.C. The amount of business loans was up 18% last year to almost $33 billion from nearly $28 billion in 2007. The average loan size is about $215, 000.
Many credit unions say they would lend even more money if they could. But a 1998 federal law caps the amount of business loans credit unions can have at 12.25% of assets. The banking industry opposes any changes to the legislation, but credit unions hope to convince Congress to lift the cap. A bill introduced last year didn’t garner enough votes.
“Credit unions want to help but many are chafing against the arbitrary cap that exists under current law,” said Daniel A. Mica, president and CEO of CUNA, which estimates that credit unions could loan $10 billion to small businesses in the first year after the cap is lifted.
Floyd Stoner, executive vice president for congressional relations for the American Bankers Association, said his organization opposes lifting the cap.
“Congress imposed the cap in the late 1990s recognizing that this wasn’t the focus of credit unions,” he said.
He said there are other ways “to free up capital.”
-By Jilian Mincer, Dow Jones Newswires
Wall St. Journal: Small businesses turning to CUs
NEW YORK (3/4/09)--Unable to get loans at banks, more small-business owners are turning to credit unions, reports the The Wall Street Journal. And credit unions could do more if an arbitrary cap on business loans were lifted, the Credit Union National Association told the nationwide newspaper.
“Credit unions are more able--and willing--than most of their banking counterparts to dole out money to small businesses,” the newspaper noted (March 3).
It cited CUNA statistics, noting that 27% of credit unions in the U.S. offer business loans, and the amount of the loans was up 18%--to almost $33 billion--last year.
“In this really bad environment, we’re doing more and more loans,” said Mike Schenk, CUNA senior economist, told the Journal.
The Journal reported that “Many credit unions say they would lend out even more money if they could. But a 1008 federal law caps the amount of business loans credit unions can have at 12.25% of assets.” Credit unions hope to convince Congress to introduce legislation to lift the cap, it added.
CUNA’s Schenk also noted that the 12.25% cap is “an arbitrary cap that was imposed in 1998 as part of the Credit Union Membership Access Act.” Historically, there were no restrictions on credit union business lending.
Also interviewed were:
Larry Wilson, president/CEO of Coastal FCU, Raleigh, N.C., who told the paper credit unions could provide $10 billion in small-business loans within the next 12 months without costing taxpayers;
Kenneth Beine, president/CEO, Shoreline CU, Two Rivers, Wis., who said more “Main Street” loans have arrived to the credit union since traditional sources of funding dried up;
John Duggan, president, Chem-Dry of Madison, and Matt Rosenhal, vice president of business services, Summit CU, Madison, Wis., who were in a photograph with the article and told about Chem-Dry receiving two business loans from Summit;
Nick Frescas, member of West Texas CU, El Paso, which gave him a loan after his home day-care business failed to get a bank loan in 2005 because it didn’t have enough assets. It is now applying for a $750,000 loan for its second building--with the credit union;
Curtis Anderson, vice president, Mountain America CU, West Jordan, Utah, who said his credit union requires more proof in underwriting but continues lending to people starting businesses.
U.S. Central: January net income at $9.2 million
LENEXA, Kan. (3/4/09)--U.S. Central recorded net income of $9.2 million during the month of January, according to the January 2009 financials posted Monday on its Web site.
Some of U.S. Central’s available-for-sale investment securities improved. Accumulated other comprehensive income (AOCI) on the balance sheet reflected an unrealized loss of $5.9 billion--down from $6 billion in December. The $100 million improvement resulted from tightened spreads during the month for asset-backed securities supported by credit card and student loan receivables.
Member balances, consisting of share and certificate accounts and Fed Funds purchased, as applicable, averaged $23.1 billion, compared with $35.3 billion during January 2008.
Net interest income totaled $12.8 million in January, compared with $18.9 million in December.
In January, the National Credit Union Administration announced its $1 billion capital infusion into U.S. Central to assist with the announced 2008 other-than-temporary impairment charge.
That brought U.S. Central’s total regulatory capital to 6.326% for January, up from 3.756% in December.
The new paid-in-capital was funded by the National Credit Union Share Insurance Fund in late January and qualified as core capital.
U.S. Central’s January 2009 financials
CUs among TALF eligible
WASHINGTON (3/4/09)—The U.S. Treasury Department and Federal Reserve Board Tuesday announced the launch of their Term Asset-Backed Securities Loan Facility (TALF), which will make up to $200 billion in three-year loans to eligible institutions.
TALF is designed to kick-start securitized lending. Based on the eligibility criteria, credit unions will be among those institutions that can apply for TALF loans.
TALF is intended to make credit available to consumers and small businesses at favorable terms by facilitating the issuance of asset-backed securities.
Under the program, which will be executed through the Federal Reserve Bank of New York, an institution applying for a loan must use one of the following forms of collateral:
Small Business Administration (SBA) securities;
Student loan securities;
Auto loan securities; or
Credit card securities.
Credit Union National Association (CUNA) Counsel for Special Projects Michael Edwards said participation, obviously, is subject to federal and state investment laws for credit unions.
Edwards noted, “Federal credit unions, in general, can invest in SBA loan pools and Sallie Mae securities—but not generally in auto loan- or credit card-backed securities under National Credit Union Administration rules.
“State laws on what types of investments credit unions are allowed to make are sometimes more liberal, but vary quite a bit state to state.”
The way the program works, Edwards explained, is that a credit union or other company with eligible asset-backed securities uses those securities as collateral for a non-recourse loan of three-year duration.
“The practical affect of the TALF program, because of its use of non-recourse lending, is to add a layer of government guarantee to these assets over and above any existing guarantee,” Edwards said.
Since they are non-recourse loans, the TALF program can seize only the securities that back the loan if the loan is not repaid by the end of the three-year term.
Edwards noted that the Treasury-Fed documents declare eligibility for “(a)ny U.S. company that owns eligible collateral...provided the company maintains an account relationship with a primary dealer.”
He added that institutions interested in TALF loans should note that the securities must be backed by recently originated loans.
Invest in America Update
Invest in America is an exciting way for credit unions to lend their members a hand during these tough times. All eligible current and new credit union members can get a great discount on a new GM or Chrysler vehicle. While the individual automakers’ offers vary, the process to obtain a discount is similar. Members are directed to www.lovemycreditunion.org. Once there, they choose their offer and can then click on a direct link to the preferred automaker. This program is designed to drive new membership and vehicle loan volume for credit unions.
In addition, CUNA Mutual Group is offering discounts designed to help credit unions increase their auto lending through the Invest in America program. These incentives include:
Free online auto loan applications through CUNA Mutual’s loanliner.com
Discounts on quick, automated decisions on loan applications
A 25% discount on CUNA Mutual’s target marketing program
To date, more than 100 Pennsylvania credit unions have opted into the Invest in America program. While launched as a pilot, the program may become permanent with your support. If you’ve not yet done so, we urge you to opt into the program by visiting the Partner Center at lovemycreditunion.org
CUNA updates CUs on NCUA corporate plan
WASHINGTON (2/19/09)—Credit union feelings run deep about whether to pursue access to the U.S. Treasury’s TARP funds, yet early results of a Credit Union National Association (CUNA) survey this week show there is an almost equal divide between those voting ‘yea’ and ‘nay.’
CUNA President/CEO Dan Mica revealed the early survey results during a 75-minute CUNA conference call Wednesday on the latest developments on the National Credit Union Administration’s (NCUA’s) corporate credit union stabilization plan. The CUNA poll ended Wednesday.
TARP is a highly controversial issue among credit unions, Mica noted on the call. The legislation that set up TARP last year included credit unions as eligible institutions, but as implemented by the U.S. Treasury Department to date, credit unions have not been included.
Mica noted he and other CUNA representatives would be meeting with Treasury officials for further discussions Wednesday afternoon.
Under the NCUA corporate liquidity plan, approved at a special closed meeting late last month, the NCUA guarantees uninsured shares at all corporate credit unions through February 2009, and established a voluntary guarantee program for uninsured shares of all corporate credit unions through Dec. 31, 2010. Additionally, the agency has agreed to provide a $1 billion capital note to U.S. Central Corporate FCU.
The NCUA declared a premium assessment to restore the National Credit Union Share Insurance Fund (NCUSIF) equity ratio to 1.3%. The premium will be collected later in 2009.
Mica said on the CUNA conference call, “If there is one area of agreement in the credit union system, it is that we would like to mitigate the cost of this program to credit unions.”
Among alternatives to do just that, CUNA is investigating:
Allowing credit unions to tap Treasury’s funds as soon as possible to deal with the corporate credit union liquidity emergency. This may require a statutory change and CUNA will sound out federal lawmakers to assess support: and
Use the NCUA’s Central Liquidity Facility (CLF) to provide the funding. CUNA is currently analyzing CLF’s legal obligations and whether there may be opportunities for additional approaches or flexibility.
Mica underscored for participants that the complexities around the NCUA plan are extensive—especially in investigating accounting and statutory issues, as CUNA continues to do.
He pledged that despite disagreement regarding approach, CUNA will continue to pursue funding alternatives for the NCUA program. CUNA’s efforts will include exploring access to TARP funds to back up the National Credit Union Share Insurance Fund (NCUSIF), as needed.
“This is a train leaving the station,” Mica warned. “If we don’t get agreement (among credit unions) to get use of TARP funds for credit unions now, whether we need those funds or not, the opportunity will close for us.”
Cramdown provisions in Obama's foreclosure plan
WASHINGTON (2/19/09)--The Credit Union National Association (CUNA) is reviewing President Barack Obama’s Homeowner Affordability and Stability plan, which was released Wednesday and includes a provision for mortgage cramdowns.
Under the president’s proposed plan, bankruptcy courts would be allowed to modify terms of existing mortgages so borrowers can continue making payments--commonly referred to as a mortgage cramdown.
Homeowners also would be required to ask their loan servicers for a modification and certify that they have complied with reasonable requests from the servicer to provide essential information.
The provision would apply only to existing mortgages under Fannie Mae and Freddie Mac conforming loan limits.
CUNA is opposed to mortgage cramdowns and is working with policymakers on a more targeted approach to cramdown proposals and the housing crisis.
If cramdown legislation is enacted, it must be specifically limited to loans that are subprime, have negative amortization, are fraudulent or abusive, and have large interest rate resets, according to CUNA.
CUNA has said mortgage cramdown could encourage borrowers’ gaming of the mortgage lending system by allowing a dissatisfied borrower from continuing to make payments on but possibly keep a home (News Now Feb. 10).
CU Day at the Legislature raises awareness at Capitol
About 75 credit union professionals from all over New Mexico met in the state’s capital February 4 to raise awareness about credit unions and their issues and get an update from lawmakers on the current Legislature now in session during Credit Union Day at the Legislature. The event started with a luncheon with a number of guest speakers from the Legislature, followed by a trip to the Capitol and an evening reception for lawmakers and credit union professionals.
The Credit Union Association of New Mexico hosted Credit Union Day.
During the luncheon, Rep. Tom Taylor (R — San Juan County, District 1), House Minority Floor Leader, spoke about the how the Legislature is facing the challenge of trying to fund all the state’s programs and projects within this year’s limited budget.
Taylor also announced that House Memorial 18 had passed that day, proclaiming the day as Credit Union Day. The proclamation noted that credit unions serve more than 615,000 New Mexicans and encourage good financial practices and work cooperatively with each other and their members toward ‘economic advancement.’ The proclamation also recognized the campaign New Mexico credit unions are conducting to raise $1 million for the state’s children’s hospital. In addition, the proclamation marked CUANM’s 50th anniversary and the service the state’s credit unions have provided to members since the first credit unions were established in New Mexico in 1935.
Other legislative guest speakers expressing their support for credit unions were Rep. Al Park (D — Bernalillo County, District 6), Sen. Kent Cravens (R — Bernalillo and Sandoval counties, District 21), Rep. Rodolpho Martinez (D — Grant and Hidalgo counties, District 39) who is also a member of the Chino Credit Union board, and Secretary of State Mary Herrera, a member of the Rio Grande Credit Union board.
Other speakers were Richard L. Anklam, president of the New Mexico Tax Research Institute, who gave an overview of the state’s taxation and budget issues, and former lobbyist Jeff Rendell who explained effective ways to communicate and spread awareness of credit union issues.
During the luncheon, the New Mexico Little Guy, a redesign of the original CUNA Little Guy developed in 2007, was unveiled. The New Mexico Little Guy is dressed in a cowboy hat and boots, Zia belt buckle and turquoise bolo tie and represents the average, hardworking New Mexico credit union member.
Following the luncheon, audience members headed to the Capitol to deliver candy, an ongoing program during which credit union professionals touch base with lawmakers and their staff. Some met with lawmakers from their own districts. Outside the Roundhouse, Everyone’s Federal Credit Union CEO Andi Baum, Four Corners Federal Credit Union CEO Phyllis Crawford and CUANM CEO Sylvia Lyon set up a New Mexico Little Guy standup figure and handed out cutouts and Post-It pads featuring the icon. Passersby expressed enthusiasm for both the new Little Guy and credit unions and most said they were members of at least one credit union.
More than 30 lawmakers attended the evening reception and mingled with the credit union contingent. They were:
Secretary of State Mary Herrera
State Treasurer James Lewis
State Attorney General Gary King
Sen. Rod Adair, (R-Chaves & Lincoln, 33)
Sen. Vernon Asbill, (R — Eddy and Otero, 34)
Sen. Tim Eichenberg, (D — Bernalillo, 15)
Sen. Stephen Fischmann — (D — Doña Ana and Sierra, 37)
Sen. Tim Keller, (D — Bernalillo, 17)
Sen. Gay Kernan, (R — Chaves, Curry, Eddy, Lea and Roosevelt, 42)
Sen. Howie Morales, (D — Catron, Grand and Socorro, 28)
Sen. Steven Neville, (R — San Juan, 2)
Rep. Eliseo Alcon, (D — Cibola and McKinley, 6)
Rep. Thomas Anderson, (R — Bernalillo, 29)
Rep. Elias Barela, (D — Valencia, 8)
Rep. Nathan Cote, (D — Doña Ana and Otero, 53)
Rep. Anna Crook, (R — Curry, 64)
Rep. Nora Espinoza, (R — Chaves, Lincoln and Otero, 59)
Rep. Thomas Garcia, (D — Colfax, Guadalupe, Mora, San Miguel and Taos, 68)
House Minority Whip Rep. Keith Gardner, (R — Chaves, Eddy, Lea and Roosevelt, 66)
Rep. Karen Giannini, (D — Bernalillo, 30)
Rep. Jimmie Hall, (R — Bernalillo, 28)
Rep. Dennis Kintigh, (R — Chaves, Lincoln and Otero, 57)
Rep. Larry Larrañaga, (R — Bernalillo, 27)
Speaker of the House Rep. Ben Lujan, (D — Santa Fe, 46)
Rep. Antonio Maestas, (D — Bernalillo, 16)
Rep. Rodolpho Martinez, (D — Grant and Hidalgo, 39)
Rep. Kathy McCoy, (R — Bernalillo, Sandoval and Santa Fe, 22)
Rep. Andy Nuñez, (D — Doña Ana, 36)
Rep. Jane Powdrell-Culbert, (R — Sandoval, 44)
Rep. William Rehm, (R — Bernalillo, 31)
Rep. Dennis Roch, (R — Curry, Harding, Quay, Roosevelt, San Miguel and Union, 67)
House Majority Whip Rep. Sheryl Williams Stapleton, (D — Bernalillo, 19)
Rep. Mimi Stewart, (D — Bernalillo, 21)
Rep. Tom Taylor, (R — San Juan, 1)
Rep. Don Tripp, (R — Catron, Socorro and Valencia, 49)
Rep. Jim Trujillo, (D — Santa Fe, 45)
Rep. Gloria Vaughn, (R — Otero, 51)
“I’m pleased. Credit Union Day was very successful from the standpoint of both quantity of legislators attending and the quality of our dialogue with them that day. About a quarter of the legislative body of New Mexico attended the event and it was obvious from talking to them that they understand and approve of credit unions and the credit union philosophy and mission. I think all our credit union professionals felt the event was an effective way to communicate with their lawmakers and raise credit union awareness,” said Juan Fernández, CUANM vice president of governmental affairs.
Guadalupe CU receives hundreds of calls after members, non-members receive spoof e-mail
Guadalupe Credit Union has reported that both members and non-members are receiving a spoof e-mail purporting to be an ‘Official Notification From Guadalupe CU.’ The e-mail reads as follows:
Please login to your Guadalupe Credit Union Online Login
and visit the Message Center section in order to read the message.
To Login, please click the link below:
Guadalupe Credit Union Online Banking
Copyright © 2009 Guadalupe Credit Union
“it is quite sophisticated as they are mimicking our Web site,” according to Annette Hernandez, Guadalupe CU’s internal auditor/compliance officer. “We have had hundreds of phone calls all morning coming from different areas of the U.S. also.”
Some people reported that the URL the link goes to has already been shut down. When CUANM attempted to follow the link, a warning appeared saying the site was a forgery and entry was blocked.
The spoof e-mail was the subject of a news story and the FBI and Attorney General have been contacted.
Guadalupe CEO Winona Nava has contacted other credit unions, noting that it could happen to them and asking if they are prepared. She suggested spoof and fraudulent e-mails could be an important topic for future training.
The report of the Guadalupe spoof e-mail came hours after CUANM was notified that a spoof e-mail purporting to be from NCUA was circulating again. That e-mail was first reported last year but appears to be making the rounds again.
This is a good time to remind your members not to provide confidential information in response to unsolicited e-mails or phone calls because their financial institutions already have that information and if they receive any they should contact their credit union. Further, remind them if they fear their information has been compromised or they have actually provided the information in response to the e-mail or call they should immediately contact you to limit the damage that can be done to their accounts.
E-mails from 'NCUA' a scam
Some credit union members have reported receiving a phishing e-mail purportedly from the NCUA. Phishing is the criminally fraudulent process of attempting to acquire sensitive information such as usernames, passwords and credit card details, by masquerading as a trustworthy entity — such as a credit union — in an e-mail.
The scam e-mail purports to be from the National Credit Union Administration (NCUA) and asks ‘FCU holder account’ to click into a link and fill in a form. The scam e-mail says the action is designed to protect the recipient’s account and threatens that if the recipient doesn’t comply, account access will be limited or denied.
The fraudulent e-mail was not sent by the NCUA or any credit union or other financial institution. No reputable financial institution, such as a credit union, will ask for personal information — account number, usernames, passwords or Social Security number — in an unsolicited e-mail.
Members should contact their credit unions if they have questions or have received a similar e-mail. A credit union directory, including phone numbers, can be found on the Credit Union Association of New Mexico Web site.
Credit unions go to Santa Fe to raise awareness in Legislature
About 75 credit union professionals from all over New Mexico met in the state’s capital February 4 to raise awareness about credit unions and their issues and get an update from lawmakers on the current Legislature now in session during Credit Union Day at the Legislature. The event started with a luncheon with a number of guest speakers from the Legislature, followed by a trip to the Capitol and an evening reception for lawmakers and credit union professionals.
The Credit Union Association of New Mexico hosted Credit Union Day.
During the luncheon, Rep. Tom Taylor (R — San Juan County, District 1), House Minority Floor Leader, spoke about the how the Legislature is facing the challenge of trying to fund all the state’s programs and projects within this year’s limited budget.
Taylor also announced that House Memorial 18 had passed that day, proclaiming the day as Credit Union Day. The proclamation noted that credit unions serve more than 615,000 New Mexicans and encourage good financial practices and work cooperatively with each other and their members toward ‘economic advancement.’ The proclamation also recognized the campaign New Mexico credit unions are conducting to raise $1 million for the state’s children’s hospital. In addition, the proclamation marked CUANM’s 50th anniversary and the service the state’s credit unions have provided to members since the first credit unions were established in New Mexico in 1935.
Other legislative guest speakers expressing their support for credit unions were Rep. Al Park (D — Bernalillo County, District 6), Sen. Kent Cravens (R — Bernalillo and Sandoval counties, District 21), Rep. Rodolpho Martinez (D — Grant and Hidalgo counties, District 39) who is also a member of the Chino Credit Union board, and Secretary of State Mary Herrera, a member of the Rio Grande Credit Union board.
Other speakers were Richard L. Anklam, president of the New Mexico Tax Research Institute, who gave an overview of the state’s taxation and budget issues, and former lobbyist Jeff Rendell who explained effective ways to communicate and spread awareness of credit union issues.
During the luncheon, the New Mexico Little Guy, a redesign of the original CUNA Little Guy developed in 2007, was unveiled. The New Mexico Little Guy is dressed in a cowboy hat and boots, Zia belt buckle and turquoise bolo tie and represents the average, hardworking New Mexico credit union member.
Following the luncheon, audience members headed to the Capitol to deliver candy, an ongoing program during which credit union professionals touch base with lawmakers and their staff. Some met with lawmakers from their own districts. Outside the Roundhouse, Everyone’s Federal Credit Union CEO Andi Baum, Four Corners Federal Credit Union CEO Phyllis Crawford and CUANM CEO Sylvia Lyon set up a New Mexico Little Guy standup figure and handed out cutouts and Post-It pads featuring the icon. Passersby expressed enthusiasm for both the new Little Guy and credit unions and most said they were members of at least one credit union.
More than 30 lawmakers attended the evening reception and mingled with the credit union contingent. They were:
Secretary of State Mary Herrera
State Treasurer James Lewis
State Attorney General Gary King
Sen. Rod Adair, (R-Chaves & Lincoln, 33)
Sen. Vernon Asbill, (R — Eddy and Otero, 34)
Sen. Tim Eichenberg, (D — Bernalillo, 15)
Sen. Stephen Fischmann — (D — Doña Ana and Sierra, 37)
Sen. Tim Keller, (D — Bernalillo, 17)
Sen. Gay Kernan, (R — Chaves, Curry, Eddy, Lea and Roosevelt, 42)
Sen. Howie Morales, (D — Catron, Grand and Socorro, 28)
Sen. Steven Neville, (R — San Juan, 2)
Rep. Eliseo Alcon, (D — Cibola and McKinley, 6)
Rep. Thomas Anderson, (R — Bernalillo, 29)
Rep. Elias Barela, (D — Valencia, 8)
Rep. Nathan Cote, (D — Doña Ana and Otero, 53)
Rep. Anna Crook, (R — Curry, 64)
Rep. Nora Espinoza, (R — Chaves, Lincoln and Otero, 59)
Rep. Thomas Garcia, (D — Colfax, Guadalupe, Mora, San Miguel and Taos, 68)
House Minority Whip Rep. Keith Gardner, (R — Chaves, Eddy, Lea and Roosevelt, 66)
Rep. Karen Giannini, (D — Bernalillo, 30)
Rep. Jimmie Hall, (R — Bernalillo, 28)
Rep. Dennis Kintigh, (R — Chaves, Lincoln and Otero, 57)
Rep. Larry Larrañaga, (R — Bernalillo, 27)
Speaker of the House Rep. Ben Lujan, (D — Santa Fe, 46)
Rep. Antonio Maestas, (D — Bernalillo, 16)
Rep. Rodolpho Martinez, (D — Grant and Hidalgo, 39)
Rep. Kathy McCoy, (R — Bernalillo, Sandoval and Santa Fe, 22)
Rep. Andy Nuñez, (D — Doña Ana, 36)
Rep. Jane Powdrell-Culbert, (R — Sandoval, 44)
Rep. William Rehm, (R — Bernalillo, 31)
Rep. Dennis Roch, (R — Curry, Harding, Quay, Roosevelt, San Miguel and Union, 67)
House Majority Whip Rep. Sheryl Williams Stapleton, (D — Bernalillo, 19)
Rep. Mimi Stewart, (D — Bernalillo, 21)
Rep. Tom Taylor, (R — San Juan, 1)
Rep. Don Tripp, (R — Catron, Socorro and Valencia, 49)
Rep. Jim Trujillo, (D — Santa Fe, 45)
Rep. Gloria Vaughn, (R — Otero, 51)
“I’m pleased. Credit Union Day was very successful from the standpoint of both quantity of legislators attending and the quality of our dialogue with them that day. About a quarter of the legislative body of New Mexico attended the event and it was obvious from talking to them that they understand and approve of credit unions and the credit union philosophy and mission. I think all our credit union professionals felt the event was an effective way to communicate with their lawmakers and raise credit union awareness,” said Juan Fernández, CUANM vice president of governmental affairs.
E-mails from 'NCUA' a scam
Some credit union members have reported receiving a phishing e-mail purportedly from the NCUA. Phishing is the criminally fraudulent process of attempting to acquire sensitive information such as usernames, passwords and credit card details, by masquerading as a trustworthy entity — such as a credit union — in an e-mail.
The scam e-mail purports to be from the National Credit Union Administration (NCUA) and asks ‘FCU holder account’ to click into a link and fill in a form. The scam e-mail says the action is designed to protect the recipient’s account and threatens that if the recipient doesn’t comply, account access will be limited or denied.
The fraudulent e-mail was not sent by the NCUA or any credit union or other financial institution. No reputable financial institution, such as a credit union, will ask for personal information — account number, usernames, passwords or Social Security number — in an unsolicited e-mail.
Members should contact their credit unions if they have questions or have received a similar e-mail. A credit union directory, including phone numbers, can be found on the Credit Union Association of New Mexico Web site.
January 2009 CUANM Network e-newsletter
In the January issue of the CUANM Network e-newsletter…
• CUs ready for 2009
• Project Zip code
• Invest in America
• Learning Center 2009
• CUNA survey sent out
• NM Little Guy to be unveiled
And more…
Read it here.
Rep. Baca offers plan for CUs under TARP
WASHINGTON (1/14/09)—Rep. Joe Baca (D-Calif.) offered an amendment to Troubled Asset Relief Program (TARP) legislation that would provide a limited form of alternative capital to help credit unions participate in government assistance programs.
Baca offered his amendment Tuesday during a House Financial Services Committee hearing titled, “Priorities for the Next Administration: Use of TARP Funds under EESA (Emergency Economic Stabilization Act).” The hearing also focused on H.R. 384, a newly introduced bill intended to modify rules governing TARP.
A member of the financial services committee, Baca questioned the fact that credit unions have not received any of the U.S. Treasury’s TARP funds even though they are included in statutory language as eligible institutions.
The California CU League met with Baca on this and other credit union issues just last week.
The Credit Union National Association (CUNA) Tuesday also kept the heat on for credit union inclusion in any new program developed by Treasury under TARP.
In a letter to the top members of the House Financial Service, CUNA urged that as Congress considers the conditions under which the administration may use a second installment of TARP funds, lawmakers should ensure credit unions are included in any additional programs developed for mutual institutions.
CUNA President/CEO Dan Mica noted in the letter that, to date, Treasury has focused its TARP efforts on capital injections.
“As a result, credit unions, including corporate credit unions, that may need access to TARP funds are shut out because the Federal Credit Union Act does not generally permit credit unions to obtain capital from outside sources,” wrote Mica.
The CUNA leader recommended that Congress consider a statutory change to the definition of net worth to allow credit unions to access TARP funds.
The CUNA letter also sought statutory systemic risk authority for the National Credit Union Administration Board (NCUA), on a similar basis to that which the Federal Deposit Insurance Corporation enjoys.
“Without a specific systemic risk provision, NCUA has been reluctant to take this action. We believe that given the uncertainty of the economic crisis, parallel authority for NCUA to address systematic risk issues in a timely fashion is reasonable.” Mica wrote.
He noted that CUNA recognizes that the challenges that our economy is facing are extraordinary, and that credit unions, as an industry, remain relatively healthy.
“While there is rightly a tendency to deal with the largest problems first, the legislative changes described herein would provide avenues to assistance for which Congress intended credit unions to be eligible, and which some credit unions may need in the near future,” Mica urged.
The letter was addressed to House Financial Services Committee Chairman Barney Frank (D-Mass.) and the panel’s ranking member, Rep. Spencer Bachus (R-Ala.).
NCUA unveils loan participation guidance
WASHINGTON (12/30/08)—The National Credit Union Administration (NCUA) has released the guidance and questionnaire the agency’s field staff uses to assist in evaluation of loan participation programs.
The overall theme of the agency’s release is that credit unions must apply the same principles to loan participations that they apply to evaluating, selecting and monitoring third-party relationships.
The NCUA has previously expressed concern regarding loan participation arrangements and it has been expected that the federal regulator would issue more direction to help credit unions avoid pitfalls.
The agency reported that outstanding loan participations more than doubled between 2003 and 2008, increasing 262% in that period compared to a 149% increase in total loans.
What’s more, the NCUA said annualized total dollars of loan participations charged off in 2008 were twice 2006 levels, resulting in the charge-off ratio increasing from 0.41% in 2006 to 0.64% in 2008. The charge-off ratio for total loans increased from 0.46% in 2006 to 0.75% in 2008.
Loan participation delinquency was 1.10% in 2006 and 2.27% in 2008. Total loan delinquency was 0.68% in 2006 and 1.13% in 2008.
The NCUA maintains that loan participation programs have their place. In his Letter to Federal Credit Unions, with guidance attached, NCUA Chairman Michael Fryzel said that properly managed loan participation programs can be beneficial to both selling and buying credit unions.
A credit union selling loan participations may gain a mechanism to manage interest rate, liquidity, and credit risks as well as an enhanced ability to serve members. The purchasing credit unions may benefit from balance sheet diversification and increased revenue.
However, the chairman reminded that there are potential risks and advised that a credit union should perform a comprehensive risk assessment before beginning loan participation activities. Due diligence, he said, is a key factor in assuring risks are identified and mitigated.
The attached guidance and questionnaire regarding evaluating loan participation programs sets our 11 pages of direction and resources to assist credit unions in setting up successful programs. It describes practices examiners will find in a well-run loan participation program involving any type of loans, including automobiles, residential mortgages, and member business loans.
The NCUA, for instance, recommends that a credit union deciding to engage in or develop a loan participation program start out small, gain experience, and build from that foundation.
“A loan participation is a third-party relationship between a seller and a buyer, and as with any third-party relationship, the benefits of loan participations are accompanied by a variety of potential risks. Management should complete a risk assessment and perform due diligence prior to entering the third-party arrangement,” the guidance said.
This guidance describes practices examiners will find in a well-run loan participation program involving any type of loans, including automobiles, residential mortgages, and member business loans.
December CUANM Network newsletter
In this issue
• CUs partner with carmaker
• Credit Union Day at the Legislature
• 2009 dues schedule stays the same
• Important! NYIB reports
• CUANM announces promotions
• Miracle Child at Disneyland
• Compliance news
And more…
in the December CUANM Network newsletter.
Mica spells out CU difference on CNBC
In the interview with host Erin Burnett on CNBC on December 16, CUNA CEO Dan Mica spells out the credit union difference, notes how credit unions are still lending to consumers in today’s economy, addresses a federal backup plan for corporate credit unions, and explains why credit unions need their own federal regulator. You can watch the interview via CNBC’s web site by clicking here.
NM credit unions get unique Chrysler incentive
New Mexico credit unions now have a unique opportunity to participate in a pilot program to provide enhanced incentives for credit union members buying new vehicles. The Credit Union Association of New Mexico is on a fast track to review this exclusive pilot program with you so you can make it available to your members as soon as possible.
The Chrysler Cash Incentive Program is now available exclusively to credit union members in a 12-state region. The pilot program was launched and unveiled to the national media this morning so credit union members can take advantage of the cash incentive immediately during this peak holiday car-buying season.
This program will provide your members with $500 or $1,000 cash incentives on most 2008 and 2009 Chrysler cars and trucks, and provide you with the opportunity to secure the auto financing, making it a fantastic and unique opportunity for both you and your members. And even better, these incentives will be layered on top of any other promotions or incentives available to the member.
A PowerPoint document with an overview of the program is available from CUANM. Please contact .
CUANM hopes you will participate in the program. This is an outstanding opportunity for New Mexico credit unions and your members.
Questions or concerns? Please call CUANM Vice President of Association Services Mike Athens at 800-366-6628 or 298-9899, extension 2234, or by e-mail to or CUANM CEO Sylvia Lyon at extension 2223 or .
Fryzel Unveils Homeowners and Credit Union Assistance Programs
NCUA Chairman Michael Fryzel yesterday provided details on the Credit Union Homeowners Affordability Relief Program (CU HARP), unveiled in November, and a complementary program to provide contingent liquidity for the credit union system, the Credit Union System Investment Program (CU SIP). Both initiatives utilize NCUA’s Central Liquidity Facility (CLF). NCUA has worked with Treasury and the Federal Reserve Board to administer the programs.
Fryzel unveiled the initiatives during appearances on CNBC and Fox Business Network Tuesday afternoon. He told the audiences that while credit unions generally did not participate in the kinds of activities that spurred the housing and mortgage crisis, some are facing liquidity problems due to the current economic turmoil.
CU HARP is designed to lower monthly mortgage payments for struggling low-and moderate-income credit union members. CU HARP will help credit unions modify mortgage terms to assist delinquent borrowers or borrowers facing undue hardships. By lowering interest rates on first mortgages, credit unions will reduce the likelihood of mortgage defaults. CU HARP gives credit unions six months to modify loans. NCUA examiners and participating state regulators will verify benefits are provided to eligible homeowners.
CU HARP enables CLF to provide advances to eligible credit unions to invest in a CU HARP Note guaranteed by the National Credit Union Share Insurance Fund (NCUSIF). The note will provide up to a 1% bonus over the CLF advance rate. Credit unions will be required to match the bonus and thereby provide up to 2% in mortgage rate relief for homeowners.
Corporate credit unions will act as agents for the CLF taking subscriptions for CU HARP participation through December 19, 2008. CLF will commence funding the program January 2, 2009, for up to $2 billion. NCUA estimates CU HARP will provide interest rate relief to 10,000 households.
CU SIP is designed to complement CU HARP by enabling the CLF to lend to credit unions to invest in NCUSIF guaranteed notes, the proceeds of which will be used to retire external system debt. The program will free collateral pledged by corporate credit unions and thereby provide increased contingent borrowing capacity.
CU SIP will be funded on a monthly basis from January through June of 2009. The NCUSIF guarantee is provided under the Temporary Corporate Credit Union Liquidity Guarantee Program announced in October. The program guarantees senior corporate credit union debt for a 75 basis point fee.
Access CU HARP and CU SIP term sheets online.
More scam calls reported
Credit unions from around New Mexico recently reported a rash of scam phone calls and text messages asking for confidential information such as members’ PINs and account numbers.
• Credit unions in Los Alamos and Santa Fe reported their members were contacted by an automated caller claiming their plastic cards were compromised. Members were then referred to a “security department” and asked for their card number and PIN. Unfortunately members have provided that personal information despite best efforts to inform them to never do that.
• According to Winona Nava, CEO of Guadalupe Credit Union, telephone calls have slowed but members are now getting text messages on their cell phones.
“From some strange reason members seem to think text messaging is more secure and so we had three members give out data this weekend,” she said.
• Juanita Whiteside, CEO of Otero Federal Credit Union, said one of her staff members received a text message purported to be from Guadalupe Credit Union. He is not a member of Guadalupe, she added.
“It just goes to show how widespread this is,” Whiteside said.
• Phyllis Crawford at Four Corners Federal Credit Union said one of her credit union’s members also received a text message.
• Three members told Rio Grande Credit Union that they were called and asked for their credit card information. None of the members revealed any personal data.
• New Mexico Central Credit Union CEO Judy Welde reported that one of the credit union board members got a call Sunday night at 9:30 saying their ATM card (versus calls about credit cards the other credit unions are experiencing) was under a “fraud alert” and to press 6 to speak to the operator. The board member simply hung up, thinking it was a scam, she noted.
• “We got a call at our home Sunday night also around 9:30 but realized it was a scam,” reported Rita Brooks, branch manager at Santa Fe Federal Credit Union. “My husband answered the phone and THINKS the recording said something about Southwest Federal Credit Union, but couldn’t be sure and that our debit card had been compromised. (We don’t have an account with Southwest Federal Credit Union.) Our teller supervisor had a call on her answering machine Sunday too, but it was around 6 p.m. Only one of our members has reported a call so far.”
• According to Marci Rulon, CEO of Southwest Federal Credit Union, members and past members have received fraudulent calls telling them attempts had been made by unauthorized people to use their debit cards. The call asked them for card numbers and PINs. All of those who received calls reportedly hung up and none gave out any confidential information.
“One past member was very upset this morning because he thought we had released his personal information to someone without his permission. Of course, that is not the case,” Rulon said, adding that this member’s perception that the credit union might have is not good for its reputation.
CUs, members being warned
The attorney general’s office has been made aware of the outbreak of calls and has contacted the local media. CUANM has been keeping credit unions apprised of the progress of the calls and also has posted a warning on its Web site consumer page. Many credit unions are also posting similar messages.
CUANM wanted to make you aware of these recent events and encourages you to contact us if you have a similar experience. Please keep us informed so we can send out updates as events unfold.
Please call the Credit Union Association with any questions or concerns at 298-9899 or 1-800-366-6628, extension 2223.
CUANM membership dues schedule remains unchanged fourth straight year
The Credit Union Association of New Mexico Board of Directors has voted to freeze the membership dues schedule again for 2009, announced William Jacobs, president and CEO of White Sands Federal Credit Union and chair of the CUANM Board of Directors. 
The current dues schedule has not been raised since 2004.
“While our organizational costs continue to increase, CUANM’s non-dues related activities help to absorb the impact normally passed on to member credit unions in the form of dues increases,” explained CUANM president and CEO Sylvia Lyon.
“We are delighted that our financial performance affords us the opportunity to return this savings to our credit unions for the fourth straight year,” continued Lyon. “We realize how difficult it is for our members to sustain their earnings in these uncertain times, and we hope that this will be another signal of how much we appreciate their support year in and year out.”
Some credit unions may see an increase or decrease because the dues are calculated based on credit union asset size. So growing credit unions or those with a decrease in assets will be assessed accordingly.
CUs buck national slump
Credit unions originated 14.7 million new loans totaling more than $200.2 billion through the first nine months of 2008, although a continuing economic slump is causing many financial institutions to back away from lending.
According to data from Callahan & Associates, solid growth occurred in key results across the credit union spectrum. Loans outstanding are up 7.2% over the past year to $568.7 billion, while share balances grew 5.8% to $679.4 billion. Membership increased by 1.3 million to 89.9 million.
Credit unions continue to provide financing for members’ homes at a healthy pace. First mortgage volume is up 26% to $56.5 billion through the first nine months of 2008 versus the same period a year ago. This activity pushed the credit union industry’s first mortgage market share up to 3.9% through the third quarter, in contrast to 2.5% a year ago. This growth in volume comes as U.S. first mortgage volume has declined 20%, according to the Mortgage Bankers Association.
Overall, the data confirms that the credit union industry is in good fiscal health, with the industry’s net worth ratio standing at 11.2% at the end of the third quarter. Credit unions continue to post positive earnings, with $3.0 billion in net income through September 30th. Although delinquencies are rising and net income is below 2007 levels, the industry continues to provide affordable credit to consumers when they cannot otherwise attain it, the role credit unions were first designed to play.
Scammers contacting CU members
Some members provide confidential info to fraudsters
Credit unions have reported that a telephone scam has occurred in the Los Alamos and Santa Fe areas. Local credit unions report their members were contacted by an automated caller claiming their plastic cards were compromised. Members were then referred to a “security department” and asked for their card number and PIN. 
Unfortunately members have provided that personal information despite best efforts to inform them to never do that.
The attorney general’s office was made aware of this situation and contacted the local media. CUANM president and CEO Sylvia Lyon taped an interview with KOB-TV Wednesday evening stressing the importance of never divulging personal financial information to any unsolicited phone caller.
CUANM wanted to make you aware of these recent events and encourages you to contact us if you have a similar experience. Please keep us informed so we can send out updates as events unfold.
Please call Lyon with any questions or concerns on her cell phone at 379-7190 or at CUANM at 298-9899 or 1-800-366-6628, extension 2223, or by .
CUANM Winter 2008 newsletter
* CUANM, CUs run ad campaigns
* Election brings political changes
* Important! NYIB reports
• Artesia CU founder dies
• New CUANM employee
• E-filing deadlines
• Compliance news
• Vendor news
And more…
Read it here.
New ‘Whenever, Whatever’ product from Southwest Corporate
New ‘Whenever, Whatever’ deposit product_thumb.jpg)
from Southwest Corporate elicits strong interest.
Read more.
FIS provides comprehensive solutions to credit union market
FIS provides comprehensive solutions to credit union market
• Automotive finance
• Card services
• Check services
• Commercial lending, loan syndication and trading
• Credit unions
• Midtier and large banking
Read more...
Web site marks CUNA 100 year anniversary
MADISON, Wis. - Historical information and campaign materials for the 100-year anniversary of credit unions is now available on a new Web site from CUNA.
The year-long celebration marks the U.S. credit union movement’s 100th anniversary, along with the 75th anniversaries of CUNA and the signing of the Federal Credit Union Act. CUNA recently launched a public relations campaign and media outreach effort devoted to the anniversary celebration, how far the movement has come in a century, and where it is headed in the future.
Campaign materials and additional resources were created for credit unions to use while promoting the celebration. At cuna.org/100years, credit unions will find:
* History - including an interactive timeline and highlights from the past 100 years credit unions.
* Video clip - CUNA President and CEO Dan Mica talks about credit unions’ 100 years of success.
* Campaign materials - credit unions can download free public relations and marketing materials, including a model speech, proclamation, celebration ideas, newsletter, press release, letter to the editor, logos, and ads to help promote the anniversary celebration.
* Online store - various promotional items and print materials for the celebration are available for purchase.
* Credit union stories and pictures - an area of the Web site was created for credit unions to share their pictures and stories.
“We couch the celebration in terms of the 100 years of growth and evolution that credit unions have undergone in order to continually improve service to members and further our tradition of People helping People,” said Dan Mica, president and CEO of CUNA. “The Web site is just one of a number of activities that CUNA has planned for the celebration.”
For more information, go to cuna.org/100years.
# # #
About CUNA
With its network of affiliated state credit union leagues, Credit Union National Association serves 90 percent of America’s 8,500 credit unions, which are owned by more than 90 million consumer members. Credit unions are not-for-profit cooperatives providing affordable financial services to people from all walks of life. For more information, visit www.cuna.org.
The Power of Association
Choice. Value. Power.
Credit unions embody these principles for America’s working families. For America’s credit unions, membership in the Credit Union National Association (CUNA) and the state leagues represents those same high values and combines them with the practical tools that let credit unions take charge of their futures.
Close to 90% of the nation’s credit unions support the goals and efforts of CUNA through membership. And for good reason. With membership, you sign on with the nation’s most experienced team of credit union advocates. You participate in the most comprehensive credit union political action program ever seen. You receive timely infor mation from the most sophisticated credit union communications program. You obtain fresh techniques and the most innovative methods for keeping your credit union at the forefront of the fast-evolving financial services industry.
For sheer political strength, the three-tier system of CUNA, the leagues, and credit unions makes CUNA membership the triple threat of the credit union movement. There are those who think that if they are louder, or bigger, or meaner, they’ve earned the right to push credit unions around. But it is only true if you let it be true. Shaping your own destiny now that’s the power of association.
Dan Mica
President and CEO
Read more about it in the Power of Association brochure.
CUNA economist advises Bloomberg about economy
NEW YORK (10/27/08)--The strength of the rise of existing housing sales accompanied by continued price drops announced Friday is “somewhat surprising, but it’s only one good number and we’re not out of the woods yet,” Credit Union National Association Senior Economist Mike Schenk told Bloomberg Radio Friday afternoon.
Schenk was interviewed on the nationwide broadcast about the Federal Reserve’s meeting next week, housing numbers and the broad economy in light of Friday’s market activity, which reflects the notion of global recession.
The prices “won’t fall a whole heck of a lot more to get the market moving,” he noted, cautioning it is “better to wait a month to confirm whether it’s a trend or an aberration.”
The National Association of Realtors had reported Friday that sales of existing homes jumped in September--up 1.4% from a year ago and the first time that sales rose compared to the previous year since November 2005 (CNN Money Oct. 24). It also reported prices were down.
Foreclosures are a driving force in the market but Friday’s figures reflect sales two months ago, he said. “A lot has changed.”
Schenk said he is not as concerned about prices as about consumer confidence. “That’s more bad news. It means it will be less likely that people will jump into the market.”
The length of the downturn is more worrisome than the recession, he noted. “The Treasury and the Fed are throwing everything at it to solve the (credit market) problem. If it works and eases up, the recession likely will continue to the middle of next year. And it will look like previous recessions but it won’t be a V shape, where you hit the bottom and then go back up,” he said.
As for access to mortgages, there are problems on both the supply and demand sides, he said.
“On the supply side are foreclosures but a bigger problem is that people expect prices to go down more. In the audiences I’ve presented to, almost all the hands go up when I ask if they expect prices to go down,” Schenk said.
“The opposite is true on the demand side. You wait. You sit on your hands. It’s not expectations but the pricing. The pricing is different, the underwriting is different and there are fewer speculators today. In the past 20% of the mortgage activity was speculation. It’s not there today,” Schenk said.
Southwest Corporate to launch new service at economic forum
New product is fully-integrated, allowing CUs to use a single source
with a centralized database for all remote deposit solutions
Plano, Texas - Southwest Corporate Federal Credit Union has announced it is targeting Tuesday, Oct. 28the opening day of its 31st annual Economic Forumto unveil its consumer-oriented remote deposit product, Member Capture. The two-day Economic Forum, which typically draws around 400 participants, is being held at the Westin Galleria Hotel in Dallas.
“Credit unions have been anxiously awaiting the release of this product. Not only will it provide additional convenience to their members, but also it will give them a competitive edge over other financial institutions,” said Brad Ganey, Southwest Corporate’s Vice President, Item Processing Services. “There’s not a credit union in the country that has the ability to match the number of brick-and-mortar branches of a Chase Bank or a Bank of America. Member capture allows credit unions to do one better by taking the branch into their members’ homes.”
Southwest Corporate will roll out Member Capture at the Economic Forum with live demonstrations and the opportunity to dialog with Southwest Corporate’s remote deposit services management and support team. Product pricing will be available and credit unions can sign up to begin the implementation process.
Member Capture is the electronic imaging and transmittal of check deposits for processing from a member’s home. Southwest Corporate’s product is fast, easy to use and requires only a PC, Internet connection and flatbed scanner to operate. And software downloads are unnecessary, because the web-based program is accessed through the credit union’s home banking program.
“Member Capture is a membership growth and retention tool. It will immediately appeal to tech-savvy individuals, but it is intuitive enough for all members to use. The guiding principle in product design has been simplicity,” Ganey said. “We mapped it to the lowest-tech user with the slowest Internet connection and incorporated an online tutorial to guide users through the three-step deposit process.”
Southwest Corporate has been providing remote deposit services since 2002. Its Branch Capture, Teller Capture, Business Capture, Member Capture and soon-to-be-introduced ATM Image Capture are fully integrated, allowing credit unions to use a single source with a single, centralized database for all remote deposit solutions. This feature ensures that duplicate deposits – regardless of where they are made – can be detected and prevented.
A unique benefit of all Southwest Corporate remote deposit services is that Southwest Corporate staff performs all MICR correction for the credit union and, in the case of Member Capture, for the member. In addition, Southwest Corporate has a dedicated support team of 11 individuals, committed to assisting credit unions with implementation, training and free ongoing support, including balancing, software and hardware.
“Over comparable timeframes, the adoption rate of remote deposit has been three to four times higher than that of Internet home banking. Member Capture is likely to become a financial institution commodity, and credit unions have the opportunity to beat banks to the punch on this product,” Ganey said. “And for those members who enjoy coming into the credit union, you can actually improve their experience. Member Capture reduces branch traffic, shortening lines and allowing your tellers to spend time with members who need extra care.”
For more information on Member Capture, call 800.442.5763 or email .
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Southwest Corporate Federal Credit Union is an $11 billion Plano, Texas-based institution that serves nearly 1,500 member credit unions nationwide. Southwest Corporate’s broad financial service portfolio includes item processing and remote deposit services, investment services, ACH origination and electronic bill payment, ALM services and advisory service through its subsidiary, Southwest Corporate Investment Services.
CUES® and JMFA form partnership
MADISON, Wis. (October 14, 2008) – The Credit Union Executives Society is pleased to announce a partnership with John M. Floyd & Associates Executive Search Group (JMFA ESG), Baytown, Texas, to offer a new service that leverages the reputation, insights and experience of the two organizations to provide credit unions with exceptional talent recruitment at an affordable cost.
With more than 30 years of experience in financial services consulting, JMFA ESG has a vast network of more than 80,000 credit union contacts, and employs a number of consultants who are former financial institution executives themselves. This coupled with its up-to-date industry insight and proven, proprietary executive search and recruitment methodologies make JMFA ESG uniquely suited to find quality senior level professionals for today’s credit unions.
“Over the past several years, JMFA ESG has become a household name among credit unions,” said Mark Hawkins, president/CEO, Altura Credit Union, Riverside, Calif. and CUES chairman of the board. He praised the decision to partner with JMFA ESG, citing “an extensive referral network and database that will ensure credit unions have access to a variety of highly qualified executives. Plus, they do much of the time-consuming preparatory work, which saves credit unions time and money.”
Fred Johnson, CUES’ president/CEO, said “CUES’ commitment to executive leadership and development along with JMFA ESG’s industry experience makes our combined effort one that will provide the preeminent recruitment services to our members.”
According to Steve Swanston, JMFA executive vice president of business development, JMFA does more than just rely on classified advertising to fill executive positions. “We have worked with credit union leadership long enough to bring a unique understanding to their search for experienced, quality executive talent,” he said.
To learn more about CUES Executive Search in partnership with JMFA Executive Search Group, and the methods and strategies they use to ensure the “perfect fit” for credit unions and executive candidates, visit cues.org/jmfaexecutivesearch/.
CUES is a Madison, Wisconsin-based independent membership association for credit union executives worldwide. Its mission is to educate and develop credit union CEOs, directors and future leaders. For more information, contact Jessica Hrubes, VP/Marketing; 800.252.2664, ext. 5362; jessica@cues.org; cues.org
JMFA ESG is a Baytown, Texas-based firm specializing in recruitment searches along with outplacement services and succession planning. JMFA ESG is a division of John M. Floyd & Associates which is a profitability and performance improvement consulting firm serving the financial services industry for more than 30 years. For more information, contact Steve Swanston, Executive Vice President; 866.264.5017; ; www.jmfaesg.com
Frank: CUs not to blame for crisis
WASHINGTON (10/22/08)—As he opened yesterday’s hearing on financial regulatory oversight in light of the country’s economic upheaval, House Financial Services Committee Chairman Barney Frank (D-Mass.) noted that credit unions “have absolutely no responsibility” for creating the current economic crisis.
He said they deserve to be recognized for it.
From there, the hearing went on for five hours to take a broad look at regulatory issues that broached the span of topics from the creation of the mortgage and housing crisis, the proper regulatory structure for the country’s financial institutions, the mortgage securitization process, and much, much more.
The hearing was a continuation of an investigation begun by the committee in July, when the panel conducted two hearings focused on regulatory restructuring and systemic risk, during which the committee heard from regulators.
Mica on bailout bill
Friday, October 3 — President Bush has this afternoon signed into law the financial rescue bill (the “Emergency Economic Stabilization Act,” HR 1424), following the House’s approval just after 1 p.m. today. With the President’s signature, the bill is now law of the land.
Some thoughts:
*Perhaps the most significant item for credit unions in the legislation is the increase in deposit insurance coverage to $250,000 (from the current $100,000). The increase, according to the legislation, will be temporary; in effect from today until Dec. 31, 2009.
By being included in this provision, credit unions remain on the same level as FDIC-insured banks in terms of deposit insurance coverage. This is vital to maintaining member and public confidence in credit unions as safe, sound and solid financial institutions.
Congress will next year address the question of making the insurance increase permanent. This, of course, would have implications for how credit unions would pay for this additional coverage.
For now, however, credit unions will pay nothing. The legislation states clearly that the temporary increase in the standard maximum share insurance amount shall not be taken into account by the NCUA Board for purposes of setting insurance premiums or share insurance deposit adjustments.
*Regarding credit union involvement in the $700 billion “Troubled Assets Relief Program” (TARP), meant to assist financial institutions (including credit unions) in selling off troubled loans and/or securities, let me suggest this (and be clear):
** BEFORE INVOKING “TARP,” PLEASE TRY TO WORK WITHIN THE CREDIT UNION SYSTEM TO RESOLVE YOUR ISSUES. TALK TO YOUR CORPORATE, YOUR LEAGUE OR US AT CUNA IF YOU NEED GUIDANCE IN WORKING WITHIN THE COOPERATIVE CREDIT UNION SYSTEM TO HELP.**
The fact is, credit unions were not at the root cause of the problems that ultimately led to this legislation; they have been – and continue to be – responsible lenders. With that in mind, the credit union movement can reinforce its image as continuing to be responsibly self-sustaining by solving our own issues.
*Along those lines, please be reminded that President Bush earlier this week signed legislation (a “continuing resolution” to keep the government funded and in business during the upcoming congressional recess). That legislation allows the NCUA’s Central Liquidity Facility to access up to $41 billion in borrowing authority from the Treasury (in other words, the bill lifted any caps on the borrowing authority).
Before going outside of the system, credit unions should consider that we do, indeed, have this additional source of funding waiting to be tapped should it be needed.
*Regarding the more practical aspects about the increase in deposit insurance coverage; Namely, what will credit unions have to do?
Chances are, credit unions will want to get the word out as quickly as possible about the increased coverage. Today, NCUA announced it is changing all of its information related to share insurance on its website, including an updated version of the official “insured status” sign. CUNA is coordinating with NCUA on this. We will be providing additional information about it and other aspects of the bill to our members this afternoon.
Three related points from our compliance staff:
--The increase to $250k is temporary (as noted, running until Dec. 31, 2009). But we are sure the regulator will not expect you to advertise this temporary status (understandably causing confusion among members). Further, as indicated, Congress will likely be revisiting the “temporary” issue.
--Insurance coverage can actually be much more than $250k. The rules on how account ownership can increase coverage – such as by use of joint accounts and trust accounts – are not being changed.
--Finally, be reminded that the $250,000 separate insurance limit on IRAs is unchanged.
Let me close with this information I came across today:
Apparently, the auto dealers have been fanning out over Capitol Hill complaining that no money is being made available for car loans (it is one of the points they made in urging “yes” votes on the bill). There may be an opportunity for credit unions to focus some of the lending/marketing dollars toward auto lending, to fill the breach described by the dealers.
I hope this information is helpful to you. Later today we will post a summary of the bill’s contents and key information on the CUNA website. Further, in the coming days, and weeks (no doubt), we will have more to share with you.
In the meantime, enjoy your weekend!
Dan
Bancography: White Sands FCU among top CUs
BIRMINGHAM, Ala. - Financial institutions that stay true to their core values and deliver for their customers have the strongest brands, an analysis of all American banks and CUs revealed. Among the top 10 credit unions, divided into five with assets less than and five with more than $1 billion, was White Sands Federal Credit Union in Las Cruces, NM. White Sands President/CEO William Jacobs is also the chair of the Credit Union Association of New Mexico board of directors.
In the first of its biannual brand value index report, Bancography determined the top banks and credit unions in the country based on a mathematical formula that backed out all tangible assets, and adjusted for franchise values such as affluence, competition and market, leaving only the strength of the intangible values, which it refers to as the brand.
“It is a quantitative ranking of brand and we were able to examine every bank and credit union in the US,” said Bancography president Steve Reider. “If we can’t attribute the value to the tangible assets and we can’t attribute it to the franchise location, then how are you getting this income, how are you getting these deposits? And the answer has got to be brand.”
Reider explained further that the brand is far more than logos, advertising strategies or how branch buildings look, and are instead the “values that the institution stands on.” Commerce Bank of Missouri, which made it into Bancography’s top 10 mid-sized bank rankings, Reider pointed out, also recently won the J.D. Power and Associates award for highest customer satisfaction at a financial institution. “That can’t be a coincidence,” he concluded.
Financial institutions that proved they have a personal relationship and rapport tended to score very highly, especially those that served a particular niche.
“They don’t play the rate game. They are absolutely competing on relationship attraction rather than pure rate-based premises,” said Reider. “If there is one way I can unite the top ranking banks, [it] is that the overwhelming majority of them have pretty focused marketing strategies from a segmentation standpoint. They aren’t trying to be all things to all price points to all people.”
But as the merger frenzy continues in the financial world, Reider sees an interesting dichotomy between growing to survive and establishing a strong brand.
“It raises a question, I believe, about how you maintain that service promise and that focus even as you expand to new line of business segments or new geographic segments,” Reider said. The rankings did not include institutions that have averaged negative operating earnings over the past three years, those operating below regulatory capital adequacy thresholds, and those without traditional retail banking operations. It also only examined financial institutions that have been in operation for three years or more.
“One of our goals in deriving this is to promote some discussion about what it really means to have a good strong, brand out there,” said Reider. (c) 2008 The Credit Union Journal and SourceMedia, Inc.
Strong brand ranking doesn’t surprise White Sands CEO
(from September 8 edition of Credit Union Journal)
Word of mouth has been White Sands Federal Credit Union’s best marketing campaign as nearly three quarters of its new accounts have been generated by referrals, CEO William Jacobs said.
“That’s really become our business development — we take care of our members and they refer people to us. That’s as simple as it’s come down to.”
Its service quality has not only earned additional accounts but also a strong reputation in the area has it has been ranked as the fourth strongest credit union (under $1 billion in assets) brand in the United States, according to a Bancography study. Jacobs took the accomplishment in stride, noting the credit union has always kept its eye on the ball when it comes to taking care of its members and establishing a positive presence in the community.
“It really doesn’t surprise me and the reason it doesn’t surprise me because a lot of credit unions try to find that new business, and we made a decision years ago that we were really going to take care of the business we had and let it grow from there,” he said.
There have been a number of bank mergers in the area, Jacobs noted, but those changes have only served to make White Sands stronger as it became better known as an establishment within the community.
“We became very service oriented,” he said, noting the credit union’s policy of opening its doors a few minutes early and closing a few minutes late to accommodate any members who might be on a tight schedule. “That sounds really kind of basic but it really made a difference for us.”
To give back to its members further, and increase the probability of them spreading the good word about White Sands, the credit union set up a number of rewards programs for repeat processes. Those rewards, combined with an increased focus on customer service, helped to gin up more loyalty, Jacobs believes.
“We really went back to basics and took care of people in the lobby. Nothing is worse than walking into any financial institution than seeing this beautiful lobby and there are two people there,” said Jacobs.
Building up a brand is the exact same way one would go about building up a reputation and a strong rapport with the community, according to Jacobs. He urged other institutions that are looking to grow and expand their reach to look first at their existing membership and how to better serve them.
“I truly believe that we tend sometimes to take our eye off what we currently have as we search for that new book of business,” he said. “Build that business from what you have and the other will come with it, but neglecting what you have will get you in trouble.”
CUANM on TV: CUs insured, in good shape
Credit Union Association of New Mexico CEO Sylvia Lyon was interviewed Friday morning on local TV about the status of credit unions during the recent financial shakeups. During her interview with Albuquerque news anchor Mike Powers, Lyon assured listeners that credit unions in New Mexico and nationwide are in good financial shape, are ready to help members and are open to new members.
The video segment is available on the KRQE Web site.
In the 2 1/2 minute segment, Lyon discussed how credit unions are performing in the current economy and the financial crisis. Credit unions are in good financial shape because they didn’t take on risky sub-prime mortgage lending, she said, and have always made responsible loans.
Lyon emphasized that federal insurance coverage through NCUA for the same amount that bank accounts are insured. And, she noted, if lawmakers raise federal insurance on bank accounts to $250,000, as recommended in the current financial rescue plan, credit union accounts will get the same extended coverage from the NCUA.
Powers asked if government employees were the biggest bloc of credit union members. Lyon replied that while that was the case in the past, now more credit unions are opening their membership to more people. She pointed interested listeners to the credit union directory on the CUANM Web site or told them to call the CUANM office and staff would help them to determine if they are eligible for membership.
“My goal was to send a clear message about the share insurance coverage. I hope this segment reaches many New Mexicans and helps create greater awareness for all consumers about credit union insurance coverage,” Lyon said about the TV interview.
Credit unions are safe, secure
In today’s financial marketplace, consumers are becoming increasingly concerned about the safety and soundness of their money. The recent failure of several financial institutions and current financial crisis, as well as the overall economy, have people very anxious. It is critically important for consumers to have confidence in their financial institution and the regulatory safeguards that are in place to help protect them.
The public should know that New Mexico credit unions are safe and sound financial institutions. The deposits of New Mexico’s 615,630 credit union members are federally insured by the National Credit Union Administration (NCUA) and backed by the full faith and credit of the United States government. Every member’s account is federally insured up to $250,000 and retirement accounts are insured up to $250,000. And as some lawmakers recommend raising that coverage to $250,000 for bank accounts, national credit union representatives are working to make sure the coverage will extend to credit unions.
In the history of the insurance fund, not one penny of insured savings has ever been lost by a member of a federally insured credit union. In addition New Mexico credit unions as a whole are in very strong shape and very well capitalized. Credit unions set aside extra capital to serve as a safety net should any losses occur. New Mexico credit union members can rest assured that their deposits are safe and sound.
In economically challenging times, consumers not only need a good deal, but also a provider they can trust. Who better to help them than an organization whose mission is people helping people?
To learn more about your insured savings, visit the following websites:
NCUA Share Insurance Estimator
NCUA ad campaign focuses on share insurance
ALEXANDRIA, Va. (10/1/08)--The National Credit Union Administration (NCUA) said yesterday it will embark on a national advertising campaign to ensure members know their money at federally-insured credit unions is backed by the full faith and credit of the U.S. Government.
A media campaign featuring “Uncle Sam” will kick-off Thursday with advertisements in the USA Today and other major U.S. newspapers. The campaign’s message is “to assure credit union members and the general public that most credit union member accounts are federally insured,” said the agency.
In addition, NCUA said it begins distributing this week to each federally-insured credit union three large lobby posters that feature “Uncle Sam” and accompanying text, “This Credit Union Is Federally Insured.”
NCUA also said Chairman Michael Fryzel plans to assure credit union CEOs via video that federal insurance remains safe and secure. He will highlight the NCUA’s electronic Insurance Tool Kit, which is designed to help members understand their federal insurance protection.
“Understandably, consumer confidence in our financial structures has been shaken by recent turmoil in the markets,” said Fryzel. “Federally insured credit unions remain a safe and sound alternative, and I will do everything in my power as chairman of the National Credit Union Administration to make certain that accurate and useful information about the National Credit Union Share Insurance Fund is available.”
Fryzel called upon credit union volunteers and professionals to “do their part to help members understand how their credit union funds are federally insured.”
Download a copy.
Credit unions assure members they're weathering financial crisis
In light of recent financial events, CUNA and the Credit Union Association of New Mexico are working to get out the word to credit unions and their members about the safety and security of credit unions and what they’re doing to weather this financial crisis. Below are some features from CUNA that will help your credit union understand what’s being done and assure your members their accounts are safe.
More details, videos and information can be found on the CUNA Web site.
• Special message from Dan Mica
Addressing the financial turmoil
It is a very busy and hectic time in Washington this week, what with the financial turmoil, the continuing wrangling over the legislative package to provide relief for the nation’s financial system, and our own struggle to make sure EVERYBODY understands credit unions have federal insurance for consumers savings too. Mica has recorded a special message to credit unions addressing concerns over what is happening to the nation’s financial system, and the ultimate impact on credit unions.
• Dan Mica has recorded a video for credit union members explaining federal savings insurance for credit unions, saying credit unions are “probably the safest depository institutions in the country right now.” The video can be embedded onto your credit union Web site from the CUNA page. Left click on the far right box and follow the directions to embed the video.
• CUs have federal savings insurance
WASHINGTON (9/25/08, UPDATED 11:30 ET)--Following President George W. Bush’s Wednesday night speech on an economic rescue plan, the Credit Union National Association (CUNA) in a national press statement today reminded consumers the money of virtually all credit union members is protected by federal insurance at their credit unions--insurance coverage that is similar to that provided to banks by the Federal Deposit Insurance Corp. (FDIC). Read more.
• Credit unions in the news during market crisis
CUNA features a list of various news stories regarding credit unions — and their stability and security — during the current market crisis. See the full list.
• Paulson says CUs included in federal rescue proposal
WASHINGTON (9/25/08)--U.S. Treasury Secretary Henry Paulson, Jr. in testimony before the House Financial Services Committee yesterday said credit unions would be included in any federal plan to rescue the financial services sector. Read more.
• President Bush asked to note NCUSIF
WASHINGTON (9/25/08)—President George W. Bush was asked by the Credit Union National Association (CUNA) Wednesday to instruct those within his administration to included federal credit union share insurance in messages meant to reassure Americans about the safety of their federally insured deposits. Read more.
• Brochure available from NCUA
The National Credit Union Administration, commonly referred to as NCUA, is the federal government agency that charters and supervises federal credit unions. NCUA also operates and manages the National Credit Union Share Insurance Fund (NCUSIF). Backed by the full faith and credit of the U.S. government, NCUSIF insures the accounts of millions of account holders in all federal credit unions and the majority of state-chartered credit unions. This brochure explains how.
September CUANM Network newsletter
In this month’s CUANM Network newsletter...
• CUs attend Dems’ convention
• Iraq vet recipient of new home
• CUs thriving in shaky market
• Red Flag requirements
• JMFA offers no-cost reviews
• Compass program improves productivity
• CUs in the news
And more…
cuanm_e-newsletter_September_2008.pdf
Southwest Corporate to launch new service at economic forum
New product is fully-integrated, allowing CUs to use a single source with a centralized database for all remote deposit solutions
Plano, Texas - Southwest Corporate Federal Credit Union has announced it is targeting Tuesday, Oct. 28, the opening day of its 31st annual Economic Forum, to unveil its consumer-oriented remote deposit product, Member Capture. The two-day Economic Forum, which typically draws around 400 participants, is being held at the Westin Galleria Hotel in Dallas.
“Credit unions have been anxiously awaiting the release of this product. Not only will it provide additional convenience to their members, but also it will give them a competitive edge over other financial institutions,” said Brad Ganey, Southwest Corporate’s Vice President, Item Processing Services. “There’s not a credit union in the country that has the ability to match the number of brick-and-mortar branches of a Chase Bank or a Bank of America. Member capture allows credit unions to do one better by taking the branch into their members’ homes.”
Southwest Corporate will roll out Member Capture at the Economic Forum with live demonstrations and the opportunity to dialog with Southwest Corporate’s remote deposit services management and support team. Product pricing will be available and credit unions can sign up to begin the implementation process.
Member Capture is the electronic imaging and transmittal of check deposits for processing from a member’s home. Southwest Corporate’s product is fast, easy to use and requires only a PC, Internet connection and flatbed scanner to operate. And software downloads are unnecessary, because the web-based program is accessed through the credit union’s home banking program.
“Member Capture is a membership growth and retention tool. It will immediately appeal to tech-savvy individuals, but it is intuitive enough for all members to use. The guiding principle in product design has been simplicity,” Ganey said. “We mapped it to the lowest-tech user with the slowest Internet connection and incorporated an online tutorial to guide users through the three-step deposit process.”
Southwest Corporate has been providing remote deposit services since 2002. Its Branch Capture, Teller Capture, Business Capture, Member Capture and soon-to-be-introduced ATM Image Capture are fully integrated, allowing credit unions to use a single source with a single, centralized database for all remote deposit solutions. This feature ensures that duplicate deposits – regardless of where they are made – can be detected and prevented.
A unique benefit of all Southwest Corporate remote deposit services is that Southwest Corporate staff performs all MICR correction for the credit union and, in the case of Member Capture, for the member. In addition, Southwest Corporate has a dedicated support team of 11 individuals, committed to assisting credit unions with implementation, training and free ongoing support, including balancing, software and hardware.
“Over comparable timeframes, the adoption rate of remote deposit has been three to four times higher than that of Internet home banking. Member Capture is likely to become a financial institution commodity, and credit unions have the opportunity to beat banks to the punch on this product,” Ganey said. “And for those members who enjoy coming into the credit union, you can actually improve their experience. Member Capture reduces branch traffic, shortening lines and allowing your tellers to spend time with members who need extra care.”
For more information on Member Capture, call 800.442.5763 or email .
CNN, Forbes on CUs: 'Grab them while you can'
ATLANTA (9/19/08)--"If there’s a calm in the economic storm, it may be credit unions, whose investors are sleeping through the night,” reported Susan Lisovicz of CNN Thursday during an interview with Neil Weinberg, senior editor of Forbes Magazine.
“We’ve had mergers and bailouts and a lot of us are nervous. Tell us why we should take a second look or in some instances a first look at credit unions,” asked Lisovicz, amid banner headlines that said, “Credit unions weather rough seas.”
Weinberg’s answer focused on two reasons why “credit unions are a safe harbor”:
* Credit unions are operated as a “stable and profitable business, taking deposits from you and me through our savings and checking accounts, and lending out money for car loans, which earns a spread that is profitable.”
* Most credit union accounts are federally insured by the government up to $100,000.
“They tend to be conservatively managed and federally insured, which in this day and age is what you want,” advised Weinberg.
He explained that through lobbying in Washington, credit unions have “managed to open the doors of membership quite a bit” and in many cases a person related to someone in an affinity group can join a credit union.
“You want to jump on board,” Weinberg advised.
When asked what is it about credit unions that doesn’t lead to the same kind of forecast for other commercial institutions, Weinberg said credit unions haven’t got into the same trouble as commercial banks that specialized in mortgages and made risky home loans.
“Typically, credit unions have federal charters and federal inspectors, with strict, tougher rules. Because they began as agricultural cooperatives, they are run conservatively. You want to go for those credit unions.”
“I got the message,” said the Lisovicz. “You want to go for a credit union. Grab them while you can.”
Hampel: CUs should 'ride out' the economy
WASHINGTON (9/17/08)--Economic news that’s bad for households will translate to pressure on credit unions, but most credit unions should “ride it out,” according to Bill Hampel, Credit Union National Association chief economist.
He noted that the government’s intervention with Fannie Mae and Freddie Mac is a good thing for the economy and households: “It removed a huge negative regarding the credit crunch, and removed some uncertainty.
“This is not to say that the economy is in for bright sailing. We are still looking for a weak economy well into next year. But, the government’s intervention with Fannie Mae and Freddie Mac at least removes one of the heavy weights on the housing market.”
With a weak economy and falling home prices, “credit unions are under enormous pressure, with the lowest earnings or net income that many boards have ever seen,” he said.
“But our message is: If you make a mistake, fix it. If it’s outside economic factors, ride it out,” he said. “For most credit unions, the recent bad numbers are the result of external factors, not bad decisions by the credit union.”
Credit unions have become collateral damage in the housing crisis. “Decent credit unions making decent lending decisions with decent policies can run into problems. That does not necessarily mean the policies have to change.”
In the “big game of chicken between Wall Street and banks” as to who pays for the Lehman Brothers’ problems, the Treasury didn’t blink, he said. “It’s way too early to see what will happen. However, investors and consumers are more nervous, he said.
“It’s important for credit unions to explain deposit insurance. It’s really important to explain that NCUA insurance works just like FDIC insurance. Credit unions without federal deposit insurance will have to make the case as to why they are safe,” he added.
“Credit unions are still in very good shape. The economic environment is not pleasant, but credit unions are well-capitalized. Still, even though credit unions aren’t responsible for the credit crunch, the low ROAs (return on assets) will be wrenching.”
Credit unions have seen increases in loan demand--almost all in mortgages, largely because the securities market, which funds the housing market, is paralyzed, he said.
“Credit unions have incredibly low delinquency rates. Charge-offs for the first half of the year tripled, but they are still low. Last year they were 0.02%--essentially zero. This year, they are three times that, at 0.06%, but that is still very, very low zero,” Hampel noted.
CUAid activated for Hurricane Ike victims
National Credit Union Foundation, Texas Credit Union Foundation Appeal for Donations from Credit Union Supporters Across America
Please click here to help survivors of Hurricane Ike.
The National Credit Union Foundation (NCUF) and the Texas Credit Union Foundation have activated the online disaster relief system CUAid.coop to raise money for credit union people affected by Hurricane Ike.
Credit union supporters in every state can now make donations through a secured website that accepts credit cards and wire transfers. While Texas credit unions can donate directly to the Texas Credit Union Foundation, individuals in Texas are encouraged to donate online via http://www.cuaid.coop/texas. Credit union supporters everywhere else can donate via www.cuaid.coop.
“We are encouraging credit union leaders all across the county to use CUAid.coop as a channel to collect donations from their employees, volunteers, and members,” explained NCUF Deputy Director Steve Bosack.
“It never ceases to amaze me how willing the credit union movement is to open their hearts to one another in times of disaster,” noted Texas Credit Union Foundation Executive Director Jill Pharr. “Often times, consumers want to help in disaster situations, but they don’t always know how to channel their desires. CUAid is a wonderful tool to facilitate a relationship between donors and a reputable charitable organization. We are encouraging credit unions across the Lone Star State to make the CUAid link available on their website, so employees and members alike can contribute to disaster relief efforts.”
As donations are posted through CUAid.coop, NCUF will coordinate with the state credit union foundation to distribute money efficiently to those who need it in the affected areas.
“We will work closely with affected credit unions and the Texas Credit Union League to assess the needs in the affected areas,” confirmed Pharr. “We will also serve as the repository for Texas credit union disaster donations, which will then be provided in the form of emergency grants for credit union employees.”
The Texas Credit Union Foundation has a two-phase support system, beginning with emergency grants of up to $500 to assist affected credit union employees with their immediate needs. The second phase will provide support for credit union employees with unmet needs after other relief has been exhausted.
All donations via CUAid.coop will go toward grants as well. Donations will be forwarded in their entirety to credit union organizations in affected areas through NCUF, which is tax-exempt under Section 501(c)(3) of the US Internal Revenue Code.
“CU Aid is one of many ways our Foundation gives back to the credit union movement to thank donors for all their generosity,” Bosack concluded.
About CUAid:
CUAid was developed by NCUF in cooperation with state credit union foundations, state credit union leagues, and the Credit Union National Association’s Disaster Preparedness Committee.
The secure online tool links the entire credit union system to raise money for disaster relief, most recently after the Iowa floods and California wildfires.
CUAid is the only program of its kind that enables credit union employees, volunteers, and members, as well as credit unions and state credit union foundations across the US, to contribute directly to support other credit union people.
CEO’s uncle evacuated in flooding
The effects of flooding from Hurricane Ike has hit close to home in New Mexico. Everyone’s CEO Andi Baum reports that her elderly uncle was among those evacuated in Louisiana. Read more.
CUNA Mutual risk managers list common scams
Tellers can be a strong line of defense against fraud
Fraud, con games, scams, and other criminal activities pose a daily threat to financial institutions. Some marvel at the ingenuity of these criminals. But until you’ve been at the losing end of the transaction, it’s difficult to feel the impact on members’ finances and lives.
The following are a few of the top scams currently targeting credit unions and members, according to CUNA Mutual Group’s risk managers:
• Counterfeit money orders and bank/credit union checks with high quality paper, graphics, and printing used to obtain funds from unsuspecting members.
• Several forms of overpayment by check—typically for several thousand dollars—with a request to wire-transfer the excess to another financial institution. These scams often begin on the Internet. Another form of this scam, called the “secret shopper,” involves members being asked to cash a check at their own bank/credit union and then wire the funds back to the scammer.
• Mailings telling members they’ve won the “International Lottery” and are now required to pay taxes and/or fees to claim their winnings.
• Funds transfer scams involving large HELOCs. Posing as a member, the fraudster requests large-dollar draws to be wire-transferred to other financial institutions. To prepare, fraudsters often request a change in the member’s callback phone number, and later request various account information that will help them impersonate the member.
The good news is, credit unions can often thwart these scams. Start by staying in touch with current scams. An excellent resource is CUNA Mutual’s RISK Alert program which provides just-in-time emails that include fraud headlines, brief summaries, and a direct link to loss prevention recommendations. (See sidebar.)
Fraud prevention tips for tellers
Training is critical, especially for front-line employees such as tellers, who play a pivotal role in deterring fraud. Here are some techniques and ideas for detecting a scam before it causes a loss to the credit union or a member:
• Trust your instincts when something seems out of the ordinary. If it looks like a duck, walks like a duck, and quacks like a duck . . .
• Don’t be afraid to ask questions. Explain to members that you’re not doing so to inconvenience them, but to ensure that their finances are secure and protected.
• Review the member’s account history and average balances to help identify unusual and suspicious transactions.
• Always know and follow your credit union’s policies and procedures (e.g. check holds and member verification). Good habits are easy to follow and hard to break. Also, your members will learn to expect them.
• Seek training in how to spot counterfeit checks and forgeries. Discuss best practices with your supervisors, branch managers, and office peers.
Fraud perpetrators continue to refine their methods of compromising and draining accounts—always trying to stay under the radar. They are experts at blending in as they accumulate credentials, identities, and eventually assets.
The first mistake credit unions make is believing that it hasn’t or won’t happen to them. It happens everywhere.
For more risk management information and access to CUNA Mutual’s Protection Resource Center, a comprehensive suite of educational resources, visit www.cunamutual.com or contact your CUNA Mutual Sales Executive at 800-356-2644.
Get e-mail alerts as new scams hit the market
Scam artists continually deploy new techniques and new frauds to extract money from credit unions and members. In the face of such “innovation,” it’s essential for credit unions to keep abreast of the latest scams and fraudulent activity.
CUNA Mutual’s RISK Alerts program serves as an online resource for the latest fraud-related information. Sortable by date or topic, the program allows you to track emerging threats and provides recommendations to help your credit union best protect itself from new risks.
Even better, you can subscribe to receive RISK Alerts e-mails featuring headlines and summaries of the latest protection news. Access to RISK Alerts is included as part of CUNA Mutual’s Credit Union Protection Resource Center, an online repository of protection and risk management information.
CUNA Mutual customers may visit the Protection Resource Center by logging in at www.cunamutual.com.
Southwest Corporate seminar designed to help CUs consider business member market
No-cost sessions aim at attracting, serving new members
sw_corporate_9-08.pdf
FIS provides comprehensive solutions to credit union market
In any given hour, 3 million transactions are being processed through ATMs, online, by phone or in financial institutions around the globe. Credit unions optimize efficiencies, mitigate risks and maximize revenues using FIS’ core-processing and business- intelligence solutions — solutions that are comprehensive, fully integrated and delivered via a single point of contact. FIS provides comprehensive solutions to a variety of markets.
Read more...fis_september_2008.pdf
JMFA offers no-obligation reviews
Overdraft Privilege Compliance and Performance Review
BAYTOWN, TX (August 28, 2008) – John M. Floyd & Associates (JMFA) is offering Credit Union Association of New Mexico members a way to determine if their existing overdraft privilege program is compliant and performing at its peak with a no-obligation JMFA Overdraft Privilege Compliance and Performance Review.
“With current economic conditions, many credit unions are relying on non-interest income provided by overdraft privilege programs to boost their bottom line and help them compete in today’s marketplace,” said James Atwood, JMFA regional director. “However,” Atwood cautioned, “if the program isn’t kept up-to-date, it can become non-compliant and end up being a liability for the credit union and a stale service that has little value for its members.”
A JMFA Overdraft Privilege Compliance and Performance Review provides an assessment of how well a credit union is complying with regulations and managing operational procedures, such as personnel and member training, and technology upgrades. This helps the institution to avoid federal and state violations and ensures that the program is providing benefits to both the credit union and its members.
CUANM members who are interested in learning more about the no-obligation, JMFA Overdraft Privilege Compliance and Performance Review should contact James Atwood, JMFA regional director, at James.Atwood@JMFA.com or call (877) 668-4857.
About JMFA
John M. Floyd & Associates (JMFA), a Preferred Business Partner for Credit Union Association of New Mexico, is a profitability and performance improvement consulting firm, serving more than 2,000 financial institutions in all 50 states and Central America. As a direct result of our programs, JMFA has helped thousands of clients dramatically improve their performance and their bottom line. Credit unions implementing the JMFA Overdraft Privilege Program have increased their non-interest income anywhere from 50% to 300%. To learn more about JMFA, please contact James Atwood, JMFA regional director, at James.Atwood@JMFA.com or (877) 668-4857.
Southwest Corporate CEO responds to WSJ article
Today’s edition of the Wall Street Journal included an article that focused on the impact of the mortgage market dislocation on several large corporate credit unions including Southwest Corporate. I would like to comment on the Wall Street Journal article as well as provide an update of our communication plans regarding the market dislocation’s impact on Southwest Corporate.
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Wall Street Journal Article
Like a similar article published earlier this summer in the American Banker, the Wall Street Journal article focused on the unrealized losses recorded by Southwest Corporate and other corporate credit unions that have invested in residential mortgage-backed securities (RMBSs). The main impact of Southwest Corporate’s RMBS investments is the balance of unrealized losses recorded within the balance sheet caption accumulated other comprehensive losses.
The overall credit quality of Southwest Corporate’s RMBSs remains high as all of our RMBS holdings are paying as expected and the overwhelming majority are rated AAA. Each month we are performing detailed credit analyses and projections on individual RMBSs as well as obtaining third party confirmation of our credit assessments. These credit analyses support our belief that the quality of our mortgage investments remains high.
The market dislocation primarily reflects a lack of liquidity in the RMBS market. In other words, there is little demand for RMBSs given general uncertainty about mortgage performance, and this lack of demand has resulted in declining values. However, our credit analyses clearly indicate that the intrinsic value of our mortgage investments remains far in excess of the reported values comprising our unrealized losses.
This overall assessment should come as no surprise to any of our members who have reviewed our previous publications and financial reports, or have listened to our webinars. The Wall Street Journal article really did not present anything new related to Southwest Corporate. We have been communicating the same facts and assessments to our members for almost a year.
Updated Communication Plans
Southwest Corporate has continually increased the level of information and the frequency of communications to our members concerning the impact of the market dislocation. We are constantly evaluating the adequacy of our information flow to our members.
In light of the increased media focus as well as the recent NCUA Letter to Credit Unions that reminded credit unions of the need for due diligence, we once again plan to expand our communication efforts with the following additional steps.
1. Increasing the frequency of quarterly financial webinars—they will now be held monthly.
2. Scheduling in-person presentations to our membership to supplement our webinars and provide the opportunity for expanded discussion. The schedule and locations of these presentations will be announced over the next few weeks.
3. Focusing on the impact of the mortgage market during the upcoming annual Economic Forum as a venue to share updated information about the impact on Southwest Corporate.
4. Providing forward-looking assessments of the mortgage market impact during our upcoming webinars and in-person meetings.
Conclusion
Southwest Corporate’s consistent message throughout this market event has been that our asset quality remains high despite the low reported “fair values” of our securities. We believe those reported values are a reflection of a dramatic lack of liquidity in the mortgage-backed securities market and do not reflect the underlying value of the assets. We believe any losses we realize will be manageable. Finally, we have stressed our continued strong earnings and related retained earnings growth.
The purpose of our ongoing communications efforts is to clearly explain to our members why we believe our asset quality remains high, and why we believe any losses we experience will be manageable and therefore not represent a credit concern for our members.
Southwest Corporate has been meeting the needs of its members for over 30 years due to the strong level of support provided by its members. The goal of our ongoing communication efforts is to be as transparent and informative as possible, thereby maintaining your confidence in and your continued support of Southwest Corporate. This goal is paramount. Southwest Corporate needs and appreciates your continued support.
Please don’t hesitate to contact me or the following individuals if you have any questions concerning the mortgage market developments and the impact to Southwest Corporate.
John Cassidy, President, CEO
214.703.7800
Bruce Fox, Executive Vice President, Chief Investment Officer
214.703.7850
Melissa Wardell, Senior Vice President, CFO
214.703.7890
Compass program helps improve productivity
The Compass Leadership Series is a 12-Month program with interactive workshops that you can start at any time. The full program is designed to improve personal productivity and the ability to lead others.
Each 4 hour workshop is $269. Or for the greatest learning opportunity and best value register for the 12-month program and save over $350! The cost of the 12-month program is $2,850. The Compass program includes:
• Over 48 hours of classroom learning
• E-learning classes
• Workbooks
• On-going coaching
• Best practices, on-the-job application
A certificate of completion will be presented to registrants who complete the training.
Courses are held at the CUANM Learning Center, 4200 Wolcott Ave. NE, Albuquerque, NM 87109.
The Compass Leadership Series is a cooperative partnership with Gemini Business Performance Solutions.
Instructor: Jo Dee Martinez
Jo Dee Martinez has been an active participant and student in business for over 20 years. She has a masters degree in business administration with an emphasis in technology management. Jo Dee is currently the owner of Gemini Business Performance Solutions, an organizational development and consulting business that focuses on developing high performance organizations.
For workshop descriptions, please visit http://www.cuanmlearningcenter.org.
About Gemini:
For over two decades, Gemini training programs have been successfully deployed in organizations large and small. The curriculum is relevant and has been proven effective in developing leaders to take on the challenges in today’s business environment. Training programs are delivered in open forum events, customized in-house programs and online training.
Risk managers list common scams
Tellers can be a strong line of defense against fraud
Fraud, con games, scams, and other criminal activities pose a daily threat to financial institutions. Some marvel at the ingenuity of these criminals. But until you’ve been at the losing end of the transaction, it’s difficult to feel the impact on members’ finances and lives.
The following are a few of the top scams currently targeting credit unions and members, according to CUNA Mutual Group’s risk managers:
• Counterfeit money orders and bank/credit union checks with high quality paper, graphics, and printing used to obtain funds from unsuspecting members.
• Several forms of overpayment by check—typically for several thousand dollars—with a request to wire-transfer the excess to another financial institution. These scams often begin on the Internet. Another form of this scam, called the “secret shopper,” involves members being asked to cash a check at their own bank/credit union and then wire the funds back to the scammer.
• Mailings telling members they’ve won the “International Lottery” and are now required to pay taxes and/or fees to claim their winnings.
• Funds transfer scams involving large HELOCs. Posing as a member, the fraudster requests large-dollar draws to be wire-transferred to other financial institutions. To prepare, fraudsters often request a change in the member’s callback phone number, and later request various account information that will help them impersonate the member.
The good news is, credit unions can often thwart these scams. Start by staying in touch with current scams. An excellent resource is CUNA Mutual’s RISK Alert program which provides just-in-time emails that include fraud headlines, brief summaries, and a direct link to loss prevention recommendations. (See sidebar.)
Fraud prevention tips for tellers
Training is critical, especially for front-line employees such as tellers, who play a pivotal role in deterring fraud. Here are some techniques and ideas for detecting a scam before it causes a loss to the credit union or a member:
• Trust your instincts when something seems out of the ordinary. If it looks like a duck, walks like a duck, and quacks like a duck . . .
• Don’t be afraid to ask questions. Explain to members that you’re not doing so to inconvenience them, but to ensure that their finances are secure and protected.
• Review the member’s account history and average balances to help identify unusual and suspicious transactions.
• Always know and follow your credit union’s policies and procedures (e.g. check holds and member verification). Good habits are easy to follow and hard to break. Also, your members will learn to expect them.
• Seek training in how to spot counterfeit checks and forgeries. Discuss best practices with your supervisors, branch managers, and office peers.
Fraud perpetrators continue to refine their methods of compromising and draining accounts—always trying to stay under the radar. They are experts at blending in as they accumulate credentials, identities, and eventually assets.
The first mistake credit unions make is believing that it hasn’t or won’t happen to them. It happens everywhere.
For more risk management information and access to CUNA Mutual’s Protection Resource Center, a comprehensive suite of educational resources, visit http://www.cunamutual.com or contact your CUNA Mutual Sales Executive at 800-356-2644.
Get e-mail alerts as new scams hit the market
Scam artists continually deploy new techniques and new frauds to extract money from credit unions and members. In the face of such “innovation,” it’s essential for credit unions to keep abreast of the latest scams and fraudulent activity.
CUNA Mutual’s RISK Alerts program serves as an online resource for the latest fraud-related information. Sortable by date or topic, the program allows you to track emerging threats and provides recommendations to help your credit union best protect itself from new risks.
Even better, you can subscribe to receive RISK Alerts e-mails featuring headlines and summaries of the latest protection news. Access to RISK Alerts is included as part of CUNA Mutual’s Credit Union Protection Resource Center, an online repository of protection and risk management information.
CUNA Mutual customers may visit the Protection Resource Center by logging in at http://www.cunamutual.com.
BOND-0608-F577
© CUNA Mutual Group, June 2008
JMFA offers free net operating analysis
BAYTOWN, TX (July 24, 2008) – John M. Floyd & Associates (JMFA) is offering Credit Union Association of New Mexico members a way to identify opportunities for increasing efficiencies and maximizing profitability in today’s increasingly competitive market with a free online Net Operating Analysis.
“In today’s challenging economic environment, many credit unions are looking for ways to sustain profitability and improve performance,” said Ron Jennings, JMFA executive sales director. “The JMFA Net Operating Analysis is an easy-to-use tool that helps them determine how they can lower operating expenses and increase their income, in addition to giving them the ability to compare their performance with their competition.”
The analysis worksheet focuses on four main components of a credit union’s profitability – Net Operating Assets, Non-interest Income, Net Operating Cost and Salary and Benefits Costs. The resulting information allows leadership to see for themselves where improvements are needed in their credit union, ranging from workflow for key operations to staffing and salary administration. Plus, it enables them to compare their institution’s results with up to five competitors, at the state or national level.
“A credit union’s ability to compete in today’s economic environment is determined by its net operating cost structure,” Jennings continued. The JMFA Net Operating Analysis gives institutions a no-cost way to determine how they compare and a map for identifying ways they can improve their performance.”
CUANM members who are interested in learning more about the free, online JMFA Net Operating Analysis, or recommendations on how to use the resulting data to make improvements in their credit union, should contact James Atwood, JMFA regional director for New Mexico credit unions, at or call (877) 668-4857.
About JMFA
John M. Floyd & Associates (JMFA), a Preferred Business Partner for Credit Union Association of New Mexico, is a profitability and performance improvement consulting firm, serving more than 2,000 financial institutions in all 50 states and Central America. JMFA is also recognized for training, account acquisition, executive placement, fraud protection solutions and earnings enhancement programs, as well as product, service, pricing and technology improvement consulting. As a direct result of our programs, JMFA has helped thousands of clients dramatically improve their performance and their bottom line. To learn more about JMFA, please contact James Atwood, JMFA regional director, at or (877) 668-4857.
SW Corporate white paper explores remote deposit service opportunities
Paper looks at businesses that might be most receptive and how remote deposit fits into a complete business services portfolio
Plano, Texas - Small business offers credit unions significant growth opportunity in a challenging economy. According to one source, businesses generating less than $10 million in annual revenue spent nearly $400 billion on financial products in 2007. One of the most powerful calling cards for credit unions seeking to attract small business accounts is remote deposit, technology that gives businesses the ability to deposit checks electronically from their business site, eliminating trips to their financial institution.
“Not since the introduction of the ATM has there been so much excitement around a product and such fast adoption of it….As banks of all sizes increasingly look to win the business of the highly-desired small business customer segment, their ability to offer coveted products – such as remote deposit – will play a large role in their overall success,” said Christine Barry, research director with Aite Group, in a Feb. 2008 report on credit unions and small business.
To assist credit unions in understanding what it takes to implement and maintain a successful remote deposit program for business members, Southwest Corporate Federal Credit Union has published a new white paper entitled, “Remote Deposit for Small Business: Greater Convenience Should Not Mean Less Service.”
The 10-page white paper examines characteristics of businesses that might be most receptive to remote deposit and how remote deposit fits into a complete business services portfolio. It also explores the future of remote deposit technology and identifies factors to consider when evaluating service providers.
One concern occasionally expressed by credit unions about remote deposit is the loss of personal contact with members. Credit unions have always prided themselves on providing better-than-bank customer service. How do they maintain that personal touch, and cross-sell additional services, when business members handle their financial services remotely?
The white paper includes recommendations for building a new business model for member service, interviews with operational and marketing experts, and comments from a credit union that believes it is creating greater member loyalty with remote deposit.
To receive a free copy of the white paper, contact Chris Bruce at 972-703-7843 or by e-mail, .
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Southwest Corporate Federal Credit Union is a $13 billion Plano, Texas-based institution that serves nearly 1,500 member credit unions nationwide. Southwest Corporate’s broad financial service portfolio includes item processing and remote deposit services, investment services, ACH origination and electronic bill payment, ATM/debit card services, and correspondent services.
Video answers member questions about safety of their deposits
CUNA has just posted a slide show on its Web site that may be of use to credit unions working to inform their members about federal deposit insurance and the safety of their money.
The slide show with audio is of NCUA Board Vice Chairman Rodney Hood explaining, in clear and familiar terms, how credit union savings are insured – “just like the FDIC does for banks” – by the NCUA.
Vice Chairman Hood made the comments last spring during an appearance on “Home and Family Finance Radio,” presented by America’s Credit Unions.
To view/hear the presentation, click here. The presentation is in Adobe “Flash” format, which is ubiquitous, and mostly seamless, on the web, according to Pat Keefe, CUNA Communications.
It is recommended that credit unions install it on their Web sites as an additional confidence builder for their members.
Some suggested language for credit unions to use for the link:
“How safe is your money? Hear a top federal official explain how savings in a credit union are fully insured by a U.S. Government Agency.”
Yes! Your money is safe at your credit union
CU funds federally insured
Albuquerque NM – New Mexico credit unions, which count over 615,000 members and hold nearly 17 percent of our state’s financial market share, are going largely unmentioned in the adverse financial headlines for a reason.
Historically, credit unions operate more conservatively and tend to hold more of their mortgage loans (about 70 percent nationally) in portfolio rather than sell them to Fannie Mae and Freddie Mac on the secondary market. And credit unions, as member-owned, not-for-profit cooperatives, are not out seeking ways to shore up lost profits by adding fees or pushing products that aren’t in the best interests of members.
“We want consumers to know that credit union accounts are federally insured through the National Credit Union Share Insurance Fund (the credit union equivalent to FDIC, administered through the National Credit Union Administration) to at least $100,000. In New Mexico, 100 percent of credit unions are insured under this program,” said Sylvia Lyon, president and CEO of the Credit Union Association of New Mexico.
The very existence of the credit union movement can be directly tied to another definitive economic situation – the Great Depression. People wanted to have a stake in their financial institution and the cooperative structure of credit unions (where every member has ownership and a vote) was born. Today we are seeing many people coming to credit unions to find a way to refinance non-traditional mortgages and put their money in a stable source offering good rates. Savings at credit unions have actually grown nearly 7 percent this year.
For information on NCUA Share Insurance, visit: the NCUA Web site.
Facts about credit union deposits
AmericasCUssecurestrongfed.pdf
CUANM June 2008 newsletter
cuanm_e-newsletter_june_2008.pdf
CO-OP Financial Services to match CMN funds
CO-OP Financial Services Creates $1 Million Matching Funds Program For Children’s Miracle Network
New Community-Focused Program Expands CO-OP’s Annual Contributions to Nearly $2 Million for the Charity
On behalf of Children’s Miracle Network, CO-OP Financial Services has created a $1 million matching funds program to encourage credit unions to participate in local fundraisers, according to CO-OP President/CEO Stan Hollen.
“CO-OP is always looking for innovative ways to assist Children’s Miracle Network and Credit Unions for Kids,” says Hollen. “By matching credit union contributions at the local level, we hope to create new fundraising opportunities for CMN children’s hospitals and see our annual $1 million donation multiply.”
Children’s Miracle Network is a non-profit organization dedicated to saving and improving the lives of children by raising funds for children’s hospitals. Each year the 170 Children’s Miracle Network hospitals provide medical care, life-saving research and preventative education to help millions of kids overcome diseases and injuries of every kind.
The Miracle Match Program has two distinct goals:
* Encourage credit unions to expand or develop a partnership with their local Children’s Miracle Network hospitals in an effort to raise new, incremental dollars.
* Substantially grow CO-OP’s $1 million dollar investment to help children’s hospitals serve an even greater number of sick and injured children.
Miracle Match Parameters
New events/activities or current events/activities that aren’t presently supported by CO-OP are open for the Miracle Match Program. The Miracle Match Program excludes existing events already receiving CO-OP support. Credit unions are eligible to receive one match per calendar year. (Credit unions with branches in multiple markets are eligible for one match per market.) Funds raised for Children’s Miracle Network will initially be matched dollar for dollar up to $10,000. Any fundraising effort exceeding $10,000 will be matched as follows:
* CO-OP will match $10,000 for funds raised between $10,000 - $49,999.
* CO-OP will match 20% of the total funds raised for amounts of $25,000+ (up to $25,000 matched).
Match will be determined based on the net proceeds to the hospital from the event/activity.
Entering its third year as the national corporate sponsor for the Children’s Miracle Network “Champions Across America” program, CO-OP sought to expand the dollars they already donate to stimulate new credit union giving for the organization. In addition to “Champions,” CO-OP runs two annual golf tournament fundraisers, sponsors dozens of additional credit union events around the country, participates in an employee giving program and a percentage of each CO-OP Network ATM transaction is donated to Children’s Miracle Network hospitals every year.
“The credit union movement and Children’s Miracle Network are guided by the same cooperative spirit and tradition of ‘people helping people,’ and CO-OP is proud to annually contribute nearly $2 million to such a worthy cause,” says Hollen. “The 17 million kids being treated at the hospitals have been confronted by more adversity in their short lives than most people will ever encounter. It’s an honor to be the largest credit union system contributor within a movement that has contributed more than $50 million to CMN through the years.”
Go to the CO-OP Miracle Match page for details and downloads.