ShareBuilder Torn on Cuts
ShareBuilder will continue to have credit union partners, reiterated Kathy Schanno, a company spokeswoman, but not as many as in the past. The change comes after ShareBuilder was bought by ING DIRECT in November 2007. Since then, ShareBuilder's CU clientele has dropped from 125 to approximately 50.
"Although we have enjoyed working with our many credit union marketing partners, we have redirected resources elsewhere and are no longer able to support these programs at the same levels as in the past," Schanno said.
One of the broker's first credit union clients, $4 billion Patelco Credit Union received notice in December that ShareBuilder will end their co-branded service agreement, effective January 2010. Schanno did not say how many CU agreements will not be or have not been renewed.
Health Plan to Debut
SAN FRANCISCO -- Credit Union Health Benefits of America, a new health plan, nonprofit, mutual benefit corporation, will make its debut in 2009.
Formed by two credit unions belonging to Credit Union Self-Insured Group of California, a workers' compensation coverage provider, CUHB will offer a variety of cost-effective, health-related plans in alliance with AssureCare, a Minneapolis-based national health benefits company, the group said.
Participants will be able to choose PPO and HMO plans that mirror plans they currently provide to employees. Those currently providing Kaiser's HMO to employees will be able to continue to do so, according to CUSIG. Health reimbursement arrangement and health savings account qualifying plans, dental plans, vision plans and a prescription drug plan administered through ExpressSripts will also be available.
CUHB has aligned with many of the same partners used to build CUSIG's workers' compensation company, the group said. These same partners are now forming Captive Insurance Co. to provide stop-loss insurance coverage.
CUHB will launch in the first quarter of 2009 with a small number of CUs and is expected to go national in 2010. Interested CUs can contact Tom Swedberg, vice president, strategic planning at WesCorp firstname.lastname@example.org or 909-720-5904 for more information.
Expect More CU Mergers,
MADISON, Wis. -- Credit union mergers are expected to accelerate this year, pushed along by extreme market pressures and the current recession, according to Dave Colby, chief economist at CUNA Mutual Group.
Even though CUNA's most recent estimates indicated a year-to-date net decline of just 198 CUs through October, Colby said he believes the rate of consolidation is higher and "likely accelerating," he wrote in CUNA Mutual Group's latest Credit Union Trends Report. CUNA reported 8,198 CUs at the end of October for a net loss of 245 CUs over the past year.
"The NCUA Insurance Report of Activity shows approved mergers of 68 over the past three months and CUNA reports the loss of just 42 CUs," according to Colby. "While some differences may be explained by timing, [such as] approved merger to actually merged, extreme market pressures and a major recession will accelerate the rate of CU consolidation going forward."
The industry can expect two consecutive years of below-trend consolidation, but a much stronger trend of mergers will emerge beginning in 2009 and continue forward well into 2011, Colby said in the report.
Veridian Board Member
Chairs Financial Panel
DES MOINES, Iowa -- Iowa's Financial Services Subcommittee, which considers all legislation regarding the state's credit unions and banks, has gained some industry muscle.
Rep. Bob Kressig (D-Cedar Falls) and a board member at Veridian Credit Union, has been appointed chairman of the subcommittee, which is part of Iowa's House Commerce Committee. A former chairman of the $1.4 billion Veridian CU for three years, Kressig continues to serve on its board. He has served in the Iowa House of Representatives since 2004.
"Iowa credit unions and banks play an important role in every community across Iowa. If we are going to create good-paying jobs in Iowa, it is essential that we have strong financial institutions for businesses and families," Kressig said.
House Speaker Pat Murphy of Dubuque made the appointment with confidence Kressig was the best man for the job.
"As the former chair of Veridian Credit Union, Rep. Kressig understands the critical role Iowa's financial institutions have in our economy," Murphy said. "I know he will serve Iowans well as chair of the House Financial Services Subcommittee."
Kressig will also serve as vice chair of both Iowa's House Commerce Committee and the Local Government Committee.
Mills Nominee for SBA
WASHINGTON -- President-elect Barack Obama has nominated Karen Gordon Mills as the next administrator of the Small Business Administration.
Mills has served as president of MMP Group, a private equity investment and advisory firm, since 1993. From 1999 to 2007, she was a founding partner and a managing director of Solera Capital, a New York-based venture capital firm. She is currently the lead director of Scott's Miracle-Gro, a public company.
Mills is also chair of Maine's Governor's Council on Competitiveness and the Economy and serves
on the board of the Maine Technology Institute. She
is a director of the Maine chapter of the Nature
SBA Acting Administrator Sandy Baruah counts Mills among his friends and colleagues and praised Obama's selection.
"Karen Mills has been a friend and professional partner over the years in both my roles as the assistant secretary of commerce and the head of the SBA," Baruah said. "She is ideally suited to lead the agency."
Baruah said Mills' background in management, venture capital, and public policy will be three elements key to leading the SBA successfully.
Atlanta CU VITA Site
To Woo New Members
ATLANTA -- Income tax return filers may have an easier time joining Atlanta City Employees Credit Union.
The $47 million CU is among the first financial institutions in Atlanta to partner with the IRS' Volunteer Income Tax Assistance program. The alliance extends tax return assistance to families with an income of $40,000 or less.
In an effort to bring in new members, the CU is also using Savings Point, a software program available at several VITA sites that will allow staff to open savings and checking accounts remotely.
Atlanta City Employees CU serves more than 14,000 members.
McCoy FCU Upgrades Collections Department
LOS GATOS, Calif. -- McCoy Federal Credit Union used collections and lending consulting firm Solutions in Finance Inc. to upgrade its out of date collections department.
"Our collections area was basically in the 18th century," said Basil Buchanan, vice president of lending for McCoy. "So we needed somebody independent and experienced to properly evaluate our entire collections process and bring us up to date."
The credit union had been using a collections outsourcing services agency to help fulfill the needs of the department.
Solutions in Finance completed a week-long evaluation at McCoy and suggest the credit union implement a more robust collection software package and revamp workflow within different areas of its collections department such as repossessions, remarketing, legal and non-clerical.
"Our primary objective in hiring Solutions in Finance was to join the 21st century because our current strategies were old. Our processes hadn't changed but the market has," Buchanan said. "Our collections department definitely needed improve workflow to alleviate many of the issues we were experiencing."
One example of workflow improvement at McCoy was that the collections manager was still performing clerical tasks instead of focusing on managing staff. After evaluation, the position is now reconfigured to manage all tasks and delegate and oversee staff.
Now the credit union does not let member accounts exceed the 30-day mark to call about any issues. The collectors are also being reviewed based on effectiveness of service rather than high call volume. A staff member has been dedicated to manage the accounts sent to collection agencies for evaluation instead of the collection supervisor.
"We didn't monitor calls before," Buchanan said. "Any issues now can go back for review, allowing us the opportunity to save the account-all of which simple adds value to our credit union. We're very happy with the changes."