Texas Credit Unions Take Advantage of Bank Woes
For one, the $496 million Velocity CU of Austin said its "bank schmank" radio and billboard ads have been well-received by the public and represent another phase of Velocity's safety and soundness marketing campaign. The bank schmank t-shirts have been particularly popular, according to Carol Cain, senior vice president of marketing.
"We don't see a reason to change based upon last week's news about Guaranty," said Cain. "The campaign is solid and still very relevant," Guaranty was the second largest U.S. bank collapse of 2009.
The fact is the past 10 months "have seen a deluge of banks in the news and so our strategy is to offer the people of Greater Austin a unique alternative to banks," Cain said.
The media stories, she noted, "have been full of news about how banks are not lending any more; we just want to ensure that people are aware that Velocity is."
Debbie Mitchell, president/CEO of Velocity, noted also that "the recent events at Guaranty are no different from what happened in the fall with Wachovia and others...We just try to serve our members well and to let others know that they're welcome to join at any time."
Other Austin-area CEOs agreed that it's business as usual, noting that Guaranty's mortgage loan troubles, particularly on real estate ventures in California and Florida, were well known. Except for the probable downsizing of its corporate headquarters, Guaranty "is not a factor in this market since most of their operations were elsewhere," commented Tony Budet, president/CEO of the $1 billion University FCU of Austin. He said his CU will continue its trusted adviser branding campaign and sees no need to alter strategy now.
Similarly, Tommy Seargeant, president/CEO of the $373 million Greater Texas FCU, said it would continue its safety and soundness campaigns in ads and newsletters. He added that he deplores "foreign interests taking over U.S. banks. We should be able to handle our own," referring to the Spanish BBVA Compass Bank, which took over Guaranty.
Mo. CU Opening Three
The $1.7 billion Community America Credit Union of Kansas City is strengthening its tie-in with Wal-Mart by opening three new branches metro-area
stores this fall.
The CU opened one of its new facilities last week in a Kansas City shopping mall with two more branches set to open in October in Kansas City, Kan., and Raytown, Mo., Community America already has a branch in Blue Springs, Mo.
"We have a good partnership with Wal-Mart and good relations with store managers," said Dennis Pierce, president/CEO. Community America has 31 branches and 136,000 members.
Pierce said he has seen no evidence yet of competition in his market from Wal-Mart's Money Center expansion within its stores. The Money Stores sell money orders and various checking products, sometimes criticized as undermining the business of bank or CU branches in the stores.
Pierce views his CU's in-store branches as good for building future loan business and favorable exposure despite a record of heavy, yet low-profit transaction volumes.
Lending CUSO Adds Mass. CUs
Northeast CUSO, a business lending entity, has partnered with the $167 million Southbridge Credit Union and the $83 million Cambridge Portuguese Credit Union.
The Keene, N.H.-based CUSO now provides services to 13 credit unions in five states. Launched in 2005, Northeast has processed more than $400 million of its partners' small business and commercial real estate applications, according to the CUSO.
Northeast Chairman Fred Healey said the new collaborations will continue to help credit unions reduce the costs of providing lending services to small businesses. Healey is also president/CEO of $645 million Workers' Credit Union in Fitchburg, Mass.
Northeast said it reported a profit in 2008, which is unusual for a CUSO, Healey noted.
"Nearly all multi credit union-owned CUSOs lose money. That is why I am pleased and positively impressed that Northeast has achieved profitability in such a tough business climate while continuing to make critical investments in its future."
Healey said the original business plan called for the CUSO to provide its owners and partners with business loan processing, underwriting and servicing and to break even.
"After three years of operations, we reached and exceeded our financial goals and many others in the process."
TNB Picks Up U.S. Postal
Dallas-based TNB Card Services announced that $207 million U.S. Postal Service Federal Credit Union will bring processing for its $22 million credit card portfolio to the card CUSO.
TNB announced that the Clinton, Md.-based credit union has entered into a "long-term agreement" for card processing for its 25,000 member CU.
TNB is working with the credit union to identify the most effective strategies to enable U.S. Postal Service FCU to gain a competitive advantage, one that will result in new cardholders, greater usage, and increased value to the cardholders.
"Besides knowledge and capabilities, we were looking for a processor that we could trust and partner with to really make a difference in our card program," said Bill Chow, vice president of operations for the U.S. Postal Service FCU.
He added, "TNB has clearly demonstrated that our business is important to them and that it offers the right tools and strategies to drive card growth and deliver a more valuable card product to our members."
"TNB brought card products to the credit union market," said Mark Fenner, senior vice president, TNB Card Services. "We know this business inside and out and are extremely successful at constructing strong and profitable card programs. We look forward to playing a role in growing U.S. Postal Service FCU's card portfolio."
U.S. Postal Service FCU serves 25,000 members through nine offices located in Maryland, Virginia, North Carolina, California, Pennsylvania and the District of Columbia.
Compliance Tool Launch
The $3.7 billion Southeast Corporate Federal Credit Union has rolled out MemberGuard, a new solution to help credit unions with regulatory compliance.
MemberGuard also centers on include information security program review, regulatory exam mitigation, security improvement planning, information security risk assessments and policy and procedure review and development.
Barry Konus, vice president of information security risk assessment at Southeast Corporate, is the principal consultant for MemberGuard.
"MemberGuard was founded on the belief that the current financial environment demands a credit union-focused service provider with credit union experience," Konus said.
SafeAmerica Buys Assets
SafeAmerica Credit Union of Pleasanton, Calif., will purchase the assets of Kaiser-Lakeside Credit Union of Oakland, Calif., following the decision of California regulators to close Kaiser-Lakeside and name the NCUA liquidating agent.
According to its latest filing with the NCUA, Kaiser-Lakeside, which had $24 million in assets, lost $571,248 during the second quarter of 2009. The value of its real estate loans fell 7.8%, and its unsecured loans declined 3.4%. The value of its equity fell 3.8%. Its nonoperating income fell 352.6%.
SafeAmerica, which was founded in 1953, has $315 million in assets and 26,900 members. Kaiser-Lakeside, which was founded in 1953, had 3,500 members. Both are state-charted credit unions with similar fields of membership.