ICUL Service Corporation
 
 
April 2012
 
 

 

Important News

CUs hold ground as IGA takes Easter recess

CUs on alert on Member Business Lending

CU market share in first mortgage origination exceeds 6.5%

New Community Investment Fund option supports Illinois CUs 

REAL Solutions CUs network at first in-person meeting for 2012

Get involved in new financial education campaign this month

Help people switch now to electronic Federal benefit payments

 

CUs hold ground as IGA takes Easter recess 
March 30, 2012 marked the third reading deadline for bills to pass in their chamber of origin. 

ICUL has been actively lobbying over 50 bills that could impact credit unions and their business operations.  Of those 50 bills, only seven are actually supported by ICUL.  The rest we oppose or have been modified to allow us to become neutral on the measures.

Major efforts have been dedicated to fee caps/restrictions on reloadable debit cards, Illinois Credit Union Act amendments, and mortgage foreclosure bills.  To read more about the status of the major initiatives facing credit unions as the Spring session moves forward, please see the April 5, 2012 issue of the Weekly Government News.  The Illinois General Assembly is on Easter recess until April 17, 2012.

CUs on alert on Member Business Lending
As you probably already know via a Congressional Action Alert issued by the League on March 28, CUNA, leagues and credit unions across the country continue to encourage Congress to enact legislation that increases the credit union member business lending (MBL) cap in order to ensure credit unions can continue to serve their small business-owning members. 

Banks have pulled out all stops to defeat credit union efforts to pass this type of legislation, similar to the battle over credit union share draft authority years ago.

Recently, Senate Majority Leader Reid and Senator Udall had enough and took to the Senate Floor to speak in favor of the legislation to increase the credit union member business lending cap.  Senator Reid was adamant that there will be a vote on the Udall bill.

Last month, things went even further. Senator Udall introduced the legislation again as a standalone bill.  The new bill, S. 2231, has been introduced to allow it to bypass all committee jurisdiction making it available to be called up for a vote at any time.  We expect the bill to be called after the Easter recess.  The time for credit unions to act is now!

As part of this endeavor, we are attempting to generate testimonials from small business owners to highlight the need for this legislation to Members of Congress.  If your credit union is involved in MBL and are interested in this effort, or for any other questions, please contact Don Edwards or Pat Huffman in Federal Governmental Affairs.

Please view the alert via the link above and act today! 

CU market share in first mortgage origination exceeds 6.5%
America's credit unions are slowly, but steadily, gaining market share in the competitive and changing home loan mortgage market.

"Our current percentage* is highest level since we began tracking this data dating to the early 1990s," stated Bob McKay, Chief Operating Officer at Baxter Credit Union and Chairman of the Board of the American Credit Union Mortgage Association (ACUMA, a non-for-profit trade group promoting credit unions in the business of home finance.)

Why are credit unions gaining share now? There are several reasons including consistent underwriting standards and maintaining a high level of trust with credit union members who are in fact the owners of this cooperative financial model, and the biggest reason of all members finally realizing their credit union offers these products and is a better alternative to banks.

"Interest in credit union home loan lending has been on the rise for the last several years. Recent media attention and social media events like Bank Transfer Day brought even further attention to the great story taking place today for American families with credit unions," added McKay.

One other important issue is most credit unions truly care about the communities in which they live and work. It's a page from the old school, from days gone by when financial institutions originated and serviced their own loans locally. Consumers personally know the people they are dealing and through good times and bad they deal with the same people. This simple concept had been overlooked in the minds of many homeowners during the crazy lending markets of a decade ago, but making a strong comeback today as homeowners, particular younger borrowers, are more sensible and do more homework prior to selecting a lender.

* Source: Credit Union Call Report data and MBA's Mortgage Market Data.
** Calculation is based on dollar volume of activity.

New Community Investment Fund option supports Illinois CUs
A new Community Investment Fund (CIF) option designed to directly improve the lives of credit union members is now available.

Driven by a partnership between Alloya Corporate Federal Credit Union, the Illinois Credit Union Foundation and the National Credit Union Foundation (NCUF), this valuable investment option is available to credit unions in Illinois. This new CIF option will provide a unique vehicle to support financial education, professional development, community outreach and emergency assistance, not only in Illinois, but across the country as well.

Why Does the Community Investment Fund Have a New Administrator?
The new CIF model is a result of the winding down of the traditional CIF option provided by U.S. Central, which was used for more than a decade. The new option, via Alloya, offers member credit unions the ability to choose a CIF certificate of deposit or a CIF share account.

"The new Community Investment Fund will provide credit unions a source of support that truly reflects the cooperative movement," said Alloya’s Chief Executive Officer, Charles Furbee. "This program provides real value for credit unions. Their investment dollars will work to support innovative credit union programs that strengthen education efforts and provide a safety net if an unexpected crisis occurs.  I would encourage every credit union to look at participating in this program."

How Does This New CIF Work?

  • Membership is required at Alloya in order to make investments.
  • A low minimum of $1,000 is needed to participate.

  • Credit unions choose the CIF investment amount and term (six-month, 12-month, 18-month, two-year or three-year).

  • Credit union investment earnings on the CIF investment are split between the credit union and the NCUF. Unless otherwise specified, the standard interest split is 50/50%.

  • Half of NCUF’s earnings are used to support its national programs, including, but not limited to financial education, credit union development education, disaster relief. The remaining half of the earnings is used for state and local distribution (consumer education, small credit union assistance, affordable home ownership, disaster relief, statewide innovations, etc).

  • Through Premier View, Alloya’s online account management system, participating credit unions can securely view their monthly interest payments.

Learn More:
Credit unions interested in the new CIF option can learn more by visiting Alloya’s website at
www.alloyacorp.org/prod_cif.php or by contacting their Member Service team at 800-342-4328

REAL Solutions CUs network at first in-person meeting for 2012
The first of two in-person meetings in 2012 for partner credit unions of the Illinois REAL Solutions program met last month.  The main highlighted topics included: Attracting Younger Members, Eco-Friendly Loans, and Comparison of Popular Pre-Paid Cards.

Jonathan Fuhrman, Marketing Consultant from CU Solutions Group (CUSG), reinforced that Generation Y (which includes people born in 1980 to the mid 1990s, which translates to young people age 17 - 32), is a target group most credit unions would like to attract as new members. The evolution of technology and lack of experience in managing money makes reaching Gen Y an interesting challenge. Fuhrman shared information on understanding Gen Y.  He then reviewed a variety of marketing methods-- traditional, online, social responsibility, mobile and referral, and explained how to maximize the effectiveness of each when reaching out to Gen Y.

Some suggestions are as simple as reviewing the images credit unions use in printed pieces, on its website and in lobby displays to make sure young, single adults are represented in the images, not just families with children and married couples. Other suggestions require more effort like creating and maintaining a Facebook page, adding QR codes to printed materials, and developing mobile Web sites and ads. As with all marketing efforts, there is not a "one-size fits all" answer because each credit union has its own goals and demographics to consider when determining the best marketing techniques to use. 

Abby Coroso from the Delta Institute presented on Eco-Friendly Loans and Energy Impact Illinois (EI2), a collaborative effort with the mission of helping residents, businesses and non-profits reduce energy use. EI2 is looking for credit unions who would like to participate as lenders in their Residential Retrofit Loan Program. Homeowners use these loans to improve energy efficiency with home improvements including upgrading their boilers or furnaces and other items including water heaters, programmable thermostats, central AC and other qualified appliances or equipment.

MembersAlliance Credit Union (Rockford) and North Side Community Federal Credit Union (Chicago) are both involved with the program, which launched in November 2011. While neither credit union has yet to make a loan through the program, both are committed to it and feel it can help their members make smart home improvements that will result in saving money on energy costs.

Recently, Suze Orman endorsed a pre-paid card that she has been promoting to consumers.  Jim Byrnes, Executive Director, National Accounts for the ICUL Service Corporation (LSC), showed how her new card compares with others in the market, including LSC's CU Money product. If you would like a copy of the comparison chart to help show your members how they can save money by using your CU's pre-paid debit card, please contact Jim directly at james.byrnes@ilcusys.org or 800-942-7124

REAL Solutions partner credit unions should mark their calendars for the Fall meeting on Tuesday, October 16 at the ICU System Center in Naperville.  Please contact Melanie Murphy, ICUL Manager, Member Services with any questions or assistance implementing REAL Solutions programs, products or services.

Currently, 87 credit unions in the state are participating. REAL stands for Relevant, Effective, Asset-building, Loyalty-producing, and is being operated by 35 leagues representing 37 states. More than 1,000 credit unions are part of the program. Additional information about Illinois’ REAL Solutions effort may be found here.

Get involved in new financial education campaign this month
Want to help raise awareness of the financial education activities of credit unions and provide monetary support them at the same time? Want to help make a difference in the financial lives of your staff and members?
 
Here is your chance!
 
The Illinois Credit Union Foundation is working with the National Credit Union Foundation (NCUF) on a new campaign entitled “Credit Unions Support Financial Education: Leading the Way to Financial Freedom.” The campaign will debut this April, National Financial Literacy Month, when credit union staff and members will be encouraged to “pledge your support for financial education.”
 
Credit unions participating in this campaign would have to commit to c
ollecting pledges for supporting financial education -- Note: "pledge" refers to a promise or commitment to act toward positive money management behaviors, not a financial obligation.

Pledges - The pledge will be answering a simple question such as "I pledge to support financial education by _____" with a variety of options. The pledge form can be downloaded as a pdf document or taken and shared online at www.financialeducation.coop.
 
The downloadable pdf is for your staff and/or members to be completed at your credit union branch. Staff and members can also take their pledge online and then share with friends via social media sites such as Facebook and Twitter. 
 
The campaign kicked off on Wednesday, April 4 as "Financially Fit Day." The idea is that there is one dedicated day for credit unions and their members to become Financially Fit! Credit union staff are encouraged to ask members to support financial education with a monetary contribution.
 
Credit unions can become financially fit by participating in various FUNdraising activities throughout the month (a list of ideas is at www.financialeducation.coop with the easiest being a casual or jeans day for staff).
 
All donations from credit unions for this campaign will be split 50/50 between NCUF and the ICU Foundation in support of their financial education initiatives to help consumers of all ages achieve financial freedom.
 
For more information and for a variety of downloadable resources to get involved, visit
http://financialeducation.coop.
 
We hope you will consider including Financially Fit Day as part of your financial education outreach during April.

Help People Switch Now to Electronic Federal Benefit Payments
S
ource: U.S. Department of the Treasury, Financial Management Service 

Everyone who receives Social Security, Supplemental Security Income or other federal benefit payments by paper check is required by the U.S. Department of the Treasury to switch to an electronic payment option by March 1, 2013.

This move will save taxpayers $1 billion over 10 years, while ensuring all federal benefit recipients receive their money in the safest, most reliable way possible.  There are only several short months left to ensure the people you serve know about this new requirement and help them make the switch to one of the two Treasury-recommended electronic payment options:

  • Direct deposit. People with checking or savings accounts can sign up to get their money by direct deposit. Their federal benefit payment will go straight into their account on payment day each month. On time, every time.
  • Direct Express® Debit MasterCard® card. Those who don’t have a bank account or who prefer a prepaid debit card, should switch to the Direct Express® card. Money will be posted to the card account on payment day each month. Cardholders can make purchases and get cash back with purchases at no charge anywhere Debit MasterCard® is accepted. There are no sign-up fees, overdraft fees or monthly fees. Some fees for optional services may apply. For information on card fees and features, visit www.GoDirect.org.

It is fast, free, and easy to switch.  Help spread the word!  People who do not choose an electronic payment option by March 1, 2013, will receive their benefit payments via the Direct Express card so they will not experience any interruption in payment.

For more information or to download or order free materials, visit www.GoDirect.org.


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