Important News - ICULEAGUE

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Important News

Regulatory fee settlement checks received at long last!

NCUA holds stabilization implementation webinar

iBelong shows results, forges ahead with second year of campaign

Invest In America keeps on rollin’ for credit unions

REAL Solutions CUs discuss VITA, foreclosure

Seven CU's part of IL State Treasurer's "Bank on” program in Rockford

Fryzel visits State Farm FCU

Regulatory fee settlement checks received at long last!
As state-chartered credit unions are well aware of, the Illinois Comptroller on June 16, 2009 mailed to all state-chartered credit unions the credits due them under the settlement in the regulatory fee case!

This action finally came after six years of negotiation and four-and-a-half years of litigation culminating in the approval of a settlement by all 3 branches of State government. The statutory credits (for regulatory fee overcharges prior to July 1, 2007), and gap credits (for regulatory fee overcharges from July 1, 2007 through December 31, 2008), total approximately $6.2 million. Issuance of the payments, in the form of State warrants, comes after several weeks of hard work by ICUL, its co-plaintiffs and IDFPR fiscal staff to develop and confirm an accurate payment protocol and calculation methodology for the distribution of the credits, consistent with the terms of the settlement.

As a follow up on June 24, 2009, Illinois state-chartered credit unions were sent a Judicial Action Alert advising that the payments were mailed in the form of a paper State warrant. If any state-chartered credit union has not received its State warrant please immediately contact either Stephen Olson (630.983.3405) or Patrick Smith (217.744.1802).

As we have previously emphasized, without the support of our affiliated credit unions and the great respect and reputation they enjoy among State legislators, it would have been impossible to negotiate a fairly balanced settlement that required the participation and approval of all three branches of government.

Especially during the difficult economic period we are now experiencing, our goal remains constant: to preserve the viability of the state and federal credit union charter and maintain and enhance a favorable operating environment for all credit unions. However, our strength and ability to succeed on core issues of concern to credit unions flow from unity. On behalf of the League Board of Directors and management, we again say “thank you” for the unity you have provided that enabled the League to aggressively pursue your interests in the fee case.

Click here to view the Judicial Action Alerts on this issue, as well as all of ICUL's active alerts.

NCUA holds stabilization implementation webinar
Last month, the NCUA held a webcast to provide credit unions with an update on the Corporate Stabilization Plan and detail the Corporate Stabilization Fund Implementation.

Under the new authority granted by Congress, the NCUA Board took action at its June 18 meeting to provide relief to credit unions in addressing the assessments related to the NCUSIF. Specific details, as outlined in NCUA Letter to Credit Unions 09-CU-14 were discussed. If you missed the webcast, it has been archived and is available by clicking here.

On a related note, the U.S. Treasury's report on financial regulatory reform, released to the public last month, would allow the National Credit Union Administration (NCUA) to maintain its safety and soundness authority over credit unions. This confirms what Treasury officials told Credit Union National Association (CUNA) President/CEO Dan Mica and other senior CUNA staff previously.

Noting that the ongoing economic uncertainty provides an "opportunity for restructuring that will genuinely produce improved regulation," NCUA Chair Michael Fryzel said that the Obama administration's proposal "merits serious consideration." The continued independence of the NCUA and the proposal's plan to create a consumer protection council will "serve to ultimately improve the safe and sound operations of the U.S. financial system," he added.

For your reference, please also consult the following stabilization resources:

ICUL Web site

CUNA's Web site

NCUA's Web site

iBelong shows results, forges ahead with second year of campaign
In 2008 the Illinois Credit Union League, along with 140 Illinois credit unions launched a major cooperative advertising campaign designed to increase consumer awareness of and interest in credit unions. Two flights ran in 2008, along with significant PR efforts with statewide Shred Days. The programs yielded impressive results, including total membership growth of over 47,000 members*.

In late-2008, the ICUL Board responded quickly to volatile market changes. With the distress in the financial markets, difficulties of major industries, increasing talk of recession and depression, and catastrophic changes in the banking industry, consumers everywhere needed a safe haven for investments and a reliable resource for loans. Credit unions have always been that trusted resource. Our “People before Profits” philosophy had never been more relevant.

Because of the support and quick action from the League Board, the credit union message also proved timely. With a $320,000 contribution, the first flight of 2009 launched in January. In addition to cable TV, radio, outdoor boards and print, online media was included to help us reach a larger and slightly younger audience. And again, results were impressive.

Membership growth continues to climb – Q1 ended with net growth of over 19,000 members. Total media value was $372,200 – 22.5% greater than the original budget, not counting outdoor boards that have remained up since 2008. Over 1,500 individual credit union websites were clicked through as a result of the Zip Search feature on the site. Over 4,600 searches were done with the Find A Credit Union feature, thanks to some added support from a mention of Find a Credit Union in a Wall Street Journal article.

Statewide Shred Days took place again this year in June, with some still scheduled for July. Fall Shred Days are planned for October, following the second media flight.

Flight two is scheduled to begin in August, with the majority of the media running in September. Due to the challenging economy and added pressures from within the credit union industry, funds raised through voluntary contributions are down for the year. We are currently about $60,000 away from our goal. That will limit the buy significantly, but we will still have our message heard across the state.

It’s not too late to contribute, and according to the 2009/2010 Survey of Potential Members, CUNA suggests that “to increase membership, your credit union – no matter what type of common bond or charter – will need to continually devote significant financial, marketing, and human resources to the effort. The task is dual– to build awareness of your credit union and its advantages and also of the value, mission, and benefits of credit unions in general.” The survey goes on to report that most nonmembers are not familiar with credit unions and promoting awareness and brand building are fundamental to growth. The survey indicates resource commitment – particularly in marketing budgets – is essential to educating consumers about the credit union alternative.

Through this cooperative effort, the iBelong campaign has put credit union resources to work in a capacity far greater than any one credit union could achieve on their own – nearly $1.5 million in the last two years. Please see the League website at www.iculeague.org/awareness for complete campaign details and a contribution form.

Invest In America keeps on rollin’ for credit unions
Invest in America, an exclusive discount program with American automakers is continuing to show benefits for credit unions and their members around the country.

As of June 15, 2009, more than 139,300 vehicles attributable to the program were sold, including 67,400 GM and 71,900 Chrysler units. Of these, nearly 91,000 were purchased with a credit union loan and more than 274,000 new people became members of a credit union. There are 45 leagues and 1,700 credit unions currently in the program.

Besides driving current and potential members to your credit union for an auto loan, other benefits of being part of this program include:

The latest program updates;
Access to additional special offers and discounts on top of base program benefits;
Access to credit union level sales data;
Email addresses of members who have requested an authorization code but have not yet purchased a vehicle.
A wealth of goodwill and public relations in many mainstream media and industry publications across the country.

In addition, participating credit unions have access to free marketing kits. A third Invest in America campaign for credit unions is currently under development, and was scheduled to be available June 30 on the program’s Web site under Marketing Resources in the Partner Center of the site (Please note the Partner Center is password protected and accessible only to credit unions and leagues that have signed up in support of IIA).

A GM member survey administered by the program has also produced great results. These include:

42% financed through a credit union
90% were satisfied with the interest rate on their loan
49% considered the CU their PFI
92% used their CU member discount
92% said it was easy to get the CU discount
79% said the GM discount strengthens trust in their credit union
66% were CU members longer than five years and 39% longer than 20 years

Is your credit union along for the ride? Not all credit unions may realize they need to check on their status with the program. When the Invest in America program first rolled out in January of this year as a pilot, all member credit unions were automatically included. However, once the pilot stage passed, credit unions were required to “opt in”. Illinois is a participating league in the program, and credit unions around the state are strongly encouraged to check on their status. To do so, please go to http://www.lovemycreditunion.org and click on the list of participating credit unions and other resources under the Partner Center.

For questions or more information about the program, please contact Vicki Ponzo, ICUL Senior Vice President of Member Services at (800) 942-7124.

REAL Solutions CUs discuss VITA, foreclosure
On June 25, an in-person meeting was held for Illinois REAL Solutions Partner credit unions to discuss the Volunteer Income Tax Assistance program (VITA), as well as resources available via the Illinois State Treasurer's office regarding foreclosure and homeownership.

Relative to VITA, meeting attendees heard from Duane Cole from the Center for Economic Progress (CEP) who has been working with four credit unions who have recently joined in the VITA effort. These included NuMark CU, Sherwin Williams CU, Generations CU, and NorthSide Community FCU. These credit unions have taken significant steps to promote, get trained, volunteer and actually process tax returns for low-income families. Each of the speakers shared their experiences, tips about getting involved as a credit union new to this rewarding community service and financial literacy opportunity.

Foreclosure assistance was also a primary topic of the meeting. Kevin Smith, Director of Financial Education for the Illinois State Treasurer's Office, gave a presentation to help credit unions be a valuable resource to members who are facing or who could be facing foreclosure. Smith presented some eye-opening statistics about how the issue of foreclosure is impacting homeowners and communities across the state, as well as debunked myths and highlighted practical tips and resources that are available from the State Treasurer's office to combat this issue.

Also presenting at the meeting from the Treasurer's office was Ben Noven, Director of the Finally Home program (formerly known as Our Own Home). Finally Home helps Illinois residents buy a home or keep their existing homes from going into foreclosure. This free program asssits borrowers who cannot obtain conventional, sustainable mortgages from credible lenders because of factors such as bruised credit or a high debt-to-income ratio. Credit unions can get involved in this program to help members obtain mortgage loans. The program is open to credit unions who originate mortgages.

The Illinois Credit Union League and the Illinois Credit Union Foundation have teamed up with the National Credit Union Foundation to bring you a program called, “REAL Solutions for Low Wealth Households.” REAL stands for Relevant, Effective, Asset building, Loyalty-producing Solutions. Credit unions that want to learn more about becoming a REAL Solutions Partner are invited to join the program. Click here for more information about the program. The next meeting for REAL Solutions Partners is set for Wednesday, August 12 at the ICU System Center in Naperville.

For more information about REAL Solutions or related details about issues discussed at this meeting, check out these links below:

http://www.iculeague.org/leagueservices/RS2009.htm

http://www.centerforprogress.org/

http://www.treasurer.il.gov

http://www.makinghomeaffordable.gov/

Seven CUs part of State Treasurer's new "Bank on” program in Rockford
Rockford has become the first Illinois city to take part in a national campaign aimed at encouraging low-income families to begin banking with mainstream financial institutions.

Called “Bank On Illinois,” the program – backed by State Treasurer Alexi Giannoulias, State Rep. Chuck Jefferson and the United Way of Rock River Valley – will connect qualified “unbanked” households with free and low-cost bank accounts that will help residents save hundreds of dollars a year and put them on the path to financial security.

Several Rockford-area financial institutions, including seven credit unions, have already signed up as partners to market their products to local families when Bank On Illinois kicks off in September with a goal of starting a checking account for 20 percent of the city’s unbanked households in its first year.

Rockford is home to approximately 4,600 unbanked households, which means members of those households rely on check-cashers, payday lenders and pawn shops to cash checks, pay bills and borrow or wire money instead of a bank or credit union.

These alternative bank services are costly. The average unbanked household in Illinois pays $574 a year to cash payroll checks, leaving $22,376 in remaining income, according to the Pew Charitable Trusts.

“Not only are families paying high fees, when they can least afford them,” Giannoulias said prior to a kick-off meeting held in early June with the program’s public and private partners. They are missing out on opportunities to save for emergencies and build wealth. We want to help Rockford families build assets and create financially stable households. That translates to long-term stability and economic viability of local neighborhoods and communities.”

Nationally, 65 percent of unbanked residents are employed full-time and another 24 percent work part-time, Pew reports. However, more than half of unbanked households say they’ve never had a checking account because of misperception and distrust of banks. In response, more than 50 cities have launched Bank On Campaigns to breach this financial services gap through public-private partnerships.

Started by the San Francisco City Treasurer’s office in 2006, Bank On campaigns enlist community organizations to provide expertise on and outreach to unbanked residents, while financial institutions market and advertise appropriate, low-cost bank account products to these consumers. Elected officials act as an intermediary between the nonprofits and financial institutions, providing materials and tracking data. United Way organizations will provide community outreach. Rep. Jefferson’s office will manage the program, while Treasurer Giannoulias’ office provides materials and maintains a website.

Credit unions across Illinois will soon have the opportunity to become part of this effort, as the Treasurer’s Office expects to launch its second Bank On program in other cities throughout the state during the next year.

To participate in Bank On Illinois, financial institutions must offer free or low-cost checking and savings accounts, “second chance” accounts for people with negative histories and accept tax identification numbers, Matricula Consular and other foreign IDs in place of Social Security numbers. To qualify for an account, residents must have a history free of identity theft and fraud, and will be encouraged to enroll in financial literacy training courses.

For more information, about this program, e-mail bankonillinois@treasurer.state.il.us.

Fryzel visits State Farm FCU
National Credit Union Administration (NCUA) Chairman recently visited State Farm FCU in Bloomington.

According to an NCUA press release, Fryzel said "This credit union exemplifies those that know their members, know their needs and know how to make a difference in their everyday lives,” noted Chairman Fryzel. “State Farm Federal has been a steady and dependable source of fairly priced, cooperative financial services for nearly 75 years, and I was very impressed by their combination of state of the art products and services, and their personal approach to their members.”

After Fryzel’s visit, State Farm FCU CEO Tom DeWitt commented, “It was an honor to have Chairman Fryzel tour our credit union and meet some of our executives and staff. He was very complimentary of our operations, and we appreciated the time he spent with us.”

Concluded Fryzel, “It was a pleasure to meet with CEO Tom DeWitt and members of the board and executive staff to discuss the recently-enacted Corporate Stabilization Plan, as well as current trends in the economy and financial services sector. I enjoyed the opportunity to exchange ideas about corporate restructuring as well as listen to the ways State Farm FCU is meeting the needs of its members.”