Metz/McKennan FCU, Sioux Falls, S.D., President Ron Peters has helped raised over $2,000 for the South Dakota Credit Union League by creating and donating scrolled sawed clocks. This year Sioux Empire FCU Chairman Bob Himrich and his wife Jane were the successful bidders. For the past four years, Peters handmade clocks have been successfully auctioned at the League's annual meeting. Metz/McKennan FCU has $17.3 million in assets and serves 6,490 members. People's Alliance Federal Credit Union, Hauppauge, N.Y., has donated its employees time to participate in Long Island Volunteer Experience 2000. Volunteers assisted with lawn restoration around the bulk heading of Hecksher State Park's boat ramp to prevent erosion. PAFCU has $130.6 million in assets and serves 37,199 members. Navy Federal Credit Union, Vienna, Va., has raised over $25,000 for the American Cancer Society's Relay for Life. Team Navy Federal consisted of staff, family and friends from 15 branch offices nationwide. A total of 175 team members laced up walking shoes and did laps in the fight against cancer. The teams' fundraising efforts included car washes, bake sales, raffles, and selling Relay for Life moons and stars pledge cards at the branch offices. Navy Federal has $11 billion in assets and serves more than 1.9 million members....

Columbia Credit Union, Vancouver, Wash., has announced the relocation of its Orchards branch. The new location will be in the Albertson's Home Base Shopping Center at the corner of SR500 and 4th Plain Blvd. The branch is scheduled to open August 2000. In addition, the Association of Professional Mortgage Women (APMW) recently honored CCU's Assistant Vice President-Real Estate Lending, Bart Wescom, as Employer of the Year. CCU has $356 million in assets and serves 49,892 members. Clyde-Findlay Area Credit Union, Ohio, has awarded PWCampbell with the contract to design and build its new 3,700 square foot branch office at State Route 12 in Findlay, Ohio. Construction is scheduled to be completed in the fourth quarter of 2000. Clyde-Findlay Area CU has $65.5 million in assets and serves 13,856 members. Jax Navy FCU, Jacksonville, Fla., has recently held a ground breaking ceremony for its new Eagle Harbor and Arlington branches. The architectural firm Reynolds, Smith and Hills, Inc and contractor Dana B. Kenyon Construction Company have been selected to oversee the project. At the end of this year, the 7,750 square foot Eagle Harbor branch and phase one of the new Arlington branch are scheduled to be completed. Phase two of the Arlington branch will be finished for the grand opening in first quarter 2001. Jax Navy FCU has $1.7 billion in assets and serves over 245,000 members. Chicago Patrolmen's Federal Credit Union, has announced the grand opening of its new facility located at 1359 West Washington Street. CPFCU has $89 million in assets and serves 14,836 members....

Educational Community Credit Union, Jacksonville, Fla., has selected Rick Vecruysse "Employee of the Quarter". A veteran fraud investigator, Vecruysse also regularly takes the time to help those family members who have been victimized by the growing problem of fraud. ECCU has $420 million in assets and serves 67,241 members. Michigan Credit Union League, Northville Township Chairman Diana Nash and MCUL District VIII Director Lon Bone have been awarded the Distinguished Service Award. Recipients of the Distinguished Service Award are also inducted into the Michigan Credit Union Hall of Fame. In addition,the Michigan Credit Union Foundation has honored Research Federal Credit Union and its President/CEO Catherine Roberts with the International Credit Union Development Award. The award recognizes those credit unions who expand and strengthen the credit union community internationally and inspire other to follow suit. Army Aviation Center FCU, Daleville, Ala., has been awarded the Gold Addy Award for excellence in marketing and advertising by Dothan Advertising Federation. The award winning billboards promote the credit union's website and free Internet account access. AACFCU has $327 million in assets and serves 74,123 members. IBM Southeast Employees' FCU, Boca Raton, Fla., Southeast Services Organization President Barry L Hughes and Technology Senior Vice President Wendell Blakeley have recently graduated from the Credit Union Executive Society's CEO Institute. Admission into the CEO Institute is based on previous work experience, education and professional development. Graduates receive the title of Certified Chief Executive. IBM Southeast EFCU has $425 million in assets and serves more than 50,000 members. Virginia Credit Union League, Lynchburg, has won two first place honors in the Virginia Public Relations Awards sponsored by the Public Relations Society of America and the Richmond Chapter of PRSA. The League earned the Medallion Award for electronic communications with a budget less than $10,000 for its Daily News newsletter, a publication distributed via the Web and e-mail. Also earning a Medallion Award for publications geared toward an external audience was the League's reMember newsletter,which reaches approximately 600 credit union supporters. In its 53rd year, the Virginia Public Relations awards recognize the best strategic public relations campaign and projects of a given year....

United Teletech Federal Credit Union, Tinton Falls, N.J., has awarded six $500 college scholarships. Competing in a statewide credit union scholarship, recipients were selected based on scholastic achievement, extra curricular and community activities, teacher references, leadership qualities and written essays. Three scholarships were awarded from the Credit Union Affiliates of New Jersey's Youth Involvement Board and three were awarded from UTFCU. Local high school students Amish Babu, Matawan Regional H.S.; Gunjan Verma, Freehold Boro H.S.; Sunjay Mishra, Freehold Boro H.S.;Neel Tushar Shah, High Technology H.S.; Jeffrey Eng, Manalapan H.S.; and Heather Tatarski, Wall H.S. were presented with their certificates during their graduation ceremony. UTFCU has $192 million in assets and serves over 25,000 members. South Jersey Federal Credit Union, Deptford, has awarded six $250 scholarships to high school seniors Rohit Chopra, Eastern Regional H.S.; Alfred Fatale, Triton H.S.; Natalie Licketto, Haddon Heights H.S.; Fa'lynn Milligan, Woodrow Wilson H.S.; Katherine Wolk, Sterling H.S.; and Adrienne Worall, Overbrook Regional H.S. Applicants were judged based upon their academic performance, extra curricular and community activities, essay questions and teacher references. SJFCU has $97.5 million in assets and serves 46,081 members. IFF Employees Federal Credit Union, Union Beach, N.J., has awarded its tenth annual scholarship to Jacklyn Ann Corley in the amount of $1,000. Corley was selected based on her scholastic achievement, extra curricular and community activities, teacher references, leadership qualities and written essays. IFFEFCU has $9.3 million in assets and serves 2,371 members. Florida Commerce Credit Union, Tallahassee, has awarded three high school seniors a total of $5,000 in college scholarships. Winners were selected based on academic achievement, extracurricular activities, community involvement and essay responses. This year's award recipients are Godby H.S. senior Kelley Wiley Ballentine, $2,500; North Florida Christian School senior Kaitlin Ann Godwin, $1,500; and Rickards H.S. senior Ross Harmes, $1,000. FCCU has $105.3 million and serves 20,729 members....

The Golden 1's Judy Flores has been named the new CEO of McDonnell-Douglas West FCU.......................................................Page 3...

TOWNSHIP OF WASHINGTON, N.J. -Richard Rays has an answer for credit unions faced with the problem of not having enough money to satisfy member loan demand. That embarrassment of riches is faced by a growing number of credit unions these days, and it's beginning to have an impact on the investment portfolio as well as the lending capacity of some. But for every credit union that may be loaned out, there is a credit union somewhere that is hungry for loans. And making that connection is the answer, said Rays. Called loan participations, this concept has been coming into its own of late, and Paragon Services Inc., the credit union service organization (CUSO) of Paragon FCU here is the recognized leader in packaging such swaps. Rays says the solution will work for most credit unions-regardless of size- even low-asset credit unions. Gone are the days when credit union investing was a simple affair. Investments helped to meet a CU's income goals and excess funds went to the corporate CU or into an insured CD at a bank, said Rays. Vanilla isn't the only flavor of ice cream any more, and neither are loans or investments. But instead of whining for the "good old days" when a modicum of applied thought led to an understanding of the stock market, the monetary system and the national and global economy, why not keep the money within the CU system, he asked? He wasn't the only one doing the asking, either. Chip Filson, president of Callahan & Associates, the CU research group and "think tank" in Washington, D.C. has been advocating a "secondary market" for all kinds of credit union loans for some time. Charlie Felker of First Empire Securities, New York, calls loan participations a "great way of reallocating liquidity within the CU system." First Empire has been packaging and brokering loan participations for its clients since the beginning of the year, he said. As a securities broker to credit unions, Felker said he's seen the changes in CU investments go from long-term to short term in order to accommodate the need for cash when loan demands goes up. This can hamper low loan-to-asset CUs because they generally make longer term buys as loan substitutes. "They usually rely on their portfolio more," said Felker. And now that NCUA has put increasing demands on CUs to make more loans, some have had to lose the higher yield on the sale of those investments in order to raise the money to make member loans. The least favored option, he said, is for a CU to reduce loan limits across the board. Loan participations can be "a pressure relief valve for them," he said. And being a former NCUA investment guru, Felker is familiar with Regulation 701.22, the reg that governs loan participations. Felker estimated the market for participation loans to be between $500 million and $1 billion. Out of a total $270 billion CU portfolio, that may be seen as small, but "it's a developing market," he said. "The problem is that there's a whole lot more buyers than there are sellers." Rays sounds like a visionary when he waxes on the idea, and is on a mission of sorts to inform and educate credit unions about the options awaiting them. "The biggest stumbling block we see is that credit unions just don't understand them. They're afraid of them. Board's get starry-eyed, especially boards at small credit unions. They worry that they're buying someone else's troubles, but they're not. Face it, large credit unions have CPA's and specialized investment types to monitor a portfolio. That's all they do. A small credit union manager typically wears so many hats that he or she doesn't have the time to do it. But the only way that small CUs can grow and become more competitive is by making more loans. But once they use up excess liquidity, where do they go?" The eyes needn't glaze over, said Rays. Paragon set out to change the perception by producing a video called "Loan participation Programs for Credit Unions," and adding a 34-page written guide called the "Credit Union's Guide to Loan Participation." There's also a shorter, four-page FAQ (frequently asked questions) pamphlet on the subject. Rays believes that loan participations are much more than a "last resort for cash-strapped CUs. They are a strategic weapon of the future." Paragon has arranged a $10 million loan participation deal with Boeing CU, Tukwilla, Wash., and another $10 million deal for ESL Federal Credit Union, Rochester, N.Y. It has just signed a deal with XCU Capital Corp. Inc., Carlsbad, Calif., the CUSO of Xerox FCU, that is a partnership of sorts, said Rays. Paragon will have an employee on site there to work on loan participations. This will facilitate deals on the west coast, he said. Loan participations come in many forms, said Rays, but the bulk of them are collateralized loans, mostly auto loans, but there sure are exceptions to that rule, he said. For example, Progressive CU in New York sells its loans to other credit unions. Progressive's membership include New York taxi drivers, who borrow the money to buy the medallions for their cabs. Medallions are limited by the city government, and their value has continually risen over the years. A medallion can cost $150,000 or more. "I don't think they've ever had to foreclose on a medallion loan," said Rays. Even skittish loan participation buyers can take measures to ease their anxiety, Rays said. It's all in the agreement, which can be written to suite. Basically, a loan participation is funded by two or more CUs that each share the principal, interest and risk. But that risk is proportionate to the ownership, or as stipulated. And agreements can be written with recourse, where the hit (if there is default) is taken by the seller; or without recourse (where the buyer takes the hit). A seller can also assume a partial recourse in the event things go bad. It is not uncommon for loan participations to out-perform investments. If the loans are underwritten according to sound practices, the risks are minimal. And if they are priced appropriately, may prove a better investment than like-term Treasuries, Agencies or Certificates of Deposit. (For example, where paper is priced at 9% and experience demonstrates a strong track record where charge-offs have never exceeded .3%.) Typically, the servicing of loans is retained by the originator, who must keep records, collect payments and generate reports-for which they receive a fee that covers the costs of operation. "The beauty of it is the enhancement of risk," Rays said. "It's a tool for modeling a credit union's ALM (asset and liability) portfolio. And why earn 6% from a bank CD when a loan participation can earn 7% or higher with minimal risk?" he asked Interest in loan participations is growing, Rays noted, because he's received call from several state leagues and more and more credit unions every day. Judy Sandberg, president of Callahan Financial Services, said that at a partners meeting held in Hilton Head Island, S.C., recently, it was agreed to form an initiative to broker loan participations. "We want to take some action regarding loan participations," she said. "I'm very excited to be working on the idea." Paragon has learned a lot about packaging loan participations in the last three years, he noted, and he wouldn't advise that credit unions thinking of doing it assume they can take it on themselves. "That's a temptation, but I wouldn't recommend it. It takes expertise to do it well." -caburger@cutimes.com...

MIRAMAR, Fla., and VIRGINIA BEACH, Va.-What if you were a vendor and wanted to pitch your services to CUSO bigwigs in south Florida, but didn't want to make multiple presentations? Or, what if several credit unions in the Virginia Beach area wanted a condensed version of the big CUSO picture? The simple answer to both questions is: schedule a meeting in one convenient location, gather the best and some of the brightest thinkers, planners and doers together, bring on the sales pitch and let the questions fly. Two meetings, each different in purpose and scope took place here and in Virginia Beach recently, but it's a safe bet that things will be accomplished from both of them. A group of CUSO professionals from the south Florida area has been meeting for several years now, said Nancy Rappaport, SVP/COO of Tropical Values, Inc., the CUSO of Tropical FCU, Miami. "It's an informal group, and we get get together once a month to share ideas and talk about operations, new ideas and products or whatever one of us wants to discuss. But a lot of good has come of it." David Lawrence, executive director of Strategic partnerships for Netstock.com would likely agree. A former CUSO president himself (Advantage Resources, Inc., the CUSO of AEA CU, Sunnyvale, Calif.) Lawrence gave a presentation about Sharebuilder (CU Times, April 19) to a room of interested listeners. One of them, Tamara Douglas of Fairwinds Financial Services, is the first CUSO in the Sunshine State to offer the program. "Sharebuilder complements our current investment services program and encourages members to become introduced to the market with no restrictions on investment amounts. I think the concept will take off," said Tamara. ShareBuilder is gaining CU clients across the country, said Lawrence. As an incentive to come on board, Netstock will waive the $7,500 subsciber fee until the end of the fall as well as the $4,000 monthly maintenance fee. Mark Bugalski of Minnesota Mutual also gave a presentation on the upcoming roll out of Minnesota Life's plan for Custom Quote - the property, casualty, life, and health sales platform that will offer a national, multiple carrier delivery system supported by advanced technology and expanded call center capacity. At Chartway FCU's offices in Virginia Beach, consultant Tom Davis hosted a "Visioning Session" with five credit unions that together represent some $2 billion in assets.The purpose of the session was to provide an overview of financial service and operational CUSOs from the standpoint of multiply-owned entities. "They wondered," said Davis, "what the advantages and difficulties are to CUSOs being owned by multiple CUs." So Davis brought in Randy Karnes of WESCO, who spoke about a DP CUSO; Vic Pantea of Member Gateways who spoke about online brokerage options and start-up and governance costs; Cory Mackwood, of CU Mortgage Company spoke about a CUSO mortgage operation and Pete Snyder of Addison Avenue Financial Partners tackled what it's like to offer alternative investment services to members of several credit unions. "It was a great way to offer a concentrated view of what these kinds of approaches can bring to these credit unions," said Davis. "They were each asking, `What's in it for us?' and we were able to answer that question. "It's all about new business models. Getting scale to lower costs. Credit unions have this wonderful advantage. The cooperative model makes this stuff happen faster and better than other approaches." The assembled CUs were Langley FCU, Chartway FCU, Newport News FCU, Amphibious Base FCU and First Advantage FCU. Davis said the next step for each CU is to go back (heads full of info) and consider what they've learned and where it all fits in with their CU's planning. Another meeting will be scheduled in a month he said. -caburger@cutimes.com...

SACRAMENTO, Calif. - The California legislature has passed and sent to Gov. Gray Davis a bill sponsored by the California Credit Union League that resolves uncertainties concerning notice requirements that financial institutions must meet when they intend to sell a repossessed vehicle. In a 70-0 vote earlier this month, the state Assembly agreed on amendments that the Senate had made to A.B. 2051. The Senate unanimously passed the bill June 29 following approval of the legislation in its original form by the Assembly in a 73-0 vote May 15. Until now, state law required all financials to conduct sales of repossessed cars "in a commercially reasonable manner," but it left the specific method of sale to the discretion of the financial. It provided though that sales be either public or private. Two of the most popular "commercially reasonable" methods of selling repossessed vehicles are sales through a dealer and through a newspaper ad. But based on the wording of the current state law, it is unclear whether these sales are public or private. A.B. 2051 amends the state Uniform Commercial code to add two common examples of sales and provides a specific alternate form of notice applicable to those sales. Financials can use the "model language" notice forms in the bill when crafting their notice requirements for the sales....

Two U.S. CEO executives recount their experiences working with credit unions in Kyrgyzstan......................................Page 11...

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FEDERAL WAY, Wash. - The Washington Credit Union League and the World Council of Credit Unions have sealed a historic partnership agreement to help further the credit union movement in the Philippines. WCUL president/CEO John Annaloro and WOCCU Program Director Lois Kitsch signed the Credit Union Partnership Agreement July 12 between the two organizations to "establish cooperative partnership for the benefit of the Washington and Philippine credit union/cooperative movements." Filipino Congressmen Agapito "Butz" Aquino and Cresente "Chris" Paez congratulated the two organizations for the alliance. Aquino and Paez arrived in Washington two weeks ago on a five-day fact-finding mission to learn about the U.S. credit union regulatory and legal system (Credit Union Times, July 19). More than 15 top Washington State credit union executives, along with three state legislators and two members of the WOCCU, joined Aquino and Paez in applauding the alliance. Among the provisions of the agreement, WCUL and WOCCU will assist in the development and implementation of services for cooperatives/credit unions; create direct training opportunities; exchange information, expertise and experience; and ensure dissemination of CU ideals in the U.S. and the Philippines. "The Philippines is about 70 years behind the U.S. regarding credit unions," said Aquino. "However, we were a conquered national for several decades and we are just beginning to find our roots and stand on our own feet. But one of the greatest things we have received from America is the education we are receiving on how we can financially empower our people. We are excited about this important partnership and what it means to my country."...

OLYMPIA, Wash. - Talks are underway between Parker Cann, director of credit unions, Department of Financial Institutions, and Robert Blatner Jr., NCUA Region VI Director to iron out areas of concern Blatner has with a proposed member business lending rule. Cann is a member of the Washington Credit Union League's member business lending task force. The proposed rule was crafted by members of the committee including Stacy Augustine, director of government affairs, and other credit union representatives. The proposed rule was sent to Blatner in the end of May. Cann said Blatner subsequently indicated to him five areas of the rule he was concerned with. Cann described the concerns as "not substantive" and said he and Blatner were "talking by email" to work out the problem areas. Cann anticipates the proposed rule will be ready to be sent to the NCUA Board by the beginning of August. Of the 100 state-chartered credit unions in Washington State about 20 of them make MBLs, Cann said. Of these only two qualify for NCUA's aggregate MBL exemption. -ekingoff@cutimes.com...

AUSTIN, Texas - The Texas Credit Union Commission had a tall order in front of it when it met July 21 to confer over a long list of new credit union rules and amendments to existing rules. The rules the commission planned to look into concerned a range of topics including operational powers and confidentiality of member records, to loan participation investments, and solicitation and acceptance of brokered deposits. The rules and amendments were also discussed by the commission at a public meeting in June. Among the items on the menu at that time were rules having to do with operational powers, director fees and expenses, bond and insurance requirements, share and deposit accounts, solicitation and acceptance of brokered deposits, confidentiality of member records, and the conversion of charter and share and deposit insurance requirements....

DALLAS - Barely one month after it received approval from the state credit union department to expand its field-of-membership to include persons who live or work in Collin or Dallas counties (with some exceptions), Dallas Teachers CU has applied again for a FOM expansion. Dallas Teachers-the sixth largest CU in the state-is seeking approval to include all persons who live or work in Red Oak or Midlothian school districts. That adds to the $719 million CU's FOM a potential additional membership of about 11,000. Dallas Teachers' FOM already includes over 2 million eligible members. It currently has more than 137,000 members....

NORTHVILLE TOWNSHIP, Mich. - Nearly 170 incumbents and hopefuls for the 110 seats in the Michigan House of Representatives responded to a recent candidate survey conducted by the Michigan Credit Union League. That's a 52% response to the survey. The survey was designed to assess the candidates' views on a number of issues impacting credit unions. It also helped identify candidates with past or current relationships with CUs. The responses will be used to determine whom the MCUL and MCULAF, the Michigan Credit Union state PAC, will support in the House races this fall. The survey was restricted to House candidates only because the 38-member Michigan Senate doesn't come up for election until 2002. State House members are elected every two years, while members of the Senate serve four-year terms....

MADISON, Wis. - Through a five-year, US$3.2-million development project funded equally by the Consultative Group to Assist the Poorest (CGAP) and the Federacion Nacional de Cooperativas de Ahorro y Credito (FENACOAC) and its 28 member credit unions, the World Council of Credit Unions has developed the WOCCU Credit Union Ratings Agency to certify and rank credit unions. The overall purpose of the development project is to expand protection of member savings. The ratings and certification agency will establish and maintain prudent operations standards by monitoring, rating, certifying and offering specific economic and marketing benefits to credit unions that meet the agency's soundness criteria. Guatemalan credit unions currently participating are UPA, Parroquial Guadalupana, Guayacan Union Popular, Tonantel, Coatepeque and San Jose Obrero. By 2002, FENACOAC will require all of their member CUs to be certified and rated to qualify for continuing FENACOAC membership. In related news, Guatemalan credit unions are currently researching the feasibility of setting up a share guarantee fund that will potentially insure members' deposits up to 100,000 quetzals (US$12,000). CUs will pay premiums to support the guarantee fund. An individual credit union's premium will be determined by the rating from the WOCCU credit union ratings agency....

SUVA, Fiji - A power outage, bad weather conditions, the computer system crashing - those are the normal nightmares for American credit unions. Fortunately, no American credit union has ever had to imagine what to do when the government disintegrates. That is the problem facing Fiji's 67 credit unions, according to Basilo Vanuaca, general manager of the Fiji Credit Union League (FCUL) in an exclusive interview with Credit Union Times. Two months ago, Fiji rebels sparked a coup when they took the ousted Fiji prime minister and 17 others hostage "in a quest to disenfranchise the Pacific island's ethnic Indian minority," said the Palm Beach Post (the hostages were released July 13.) Fiji has a population of 800,000 and their economy is closely tied to New Zealand and Australia. When the coup occurred, the first industry to suffer was the hotels, shortly followed by all other industries. Forty of the credit unions are industrial and the workers have been laid off, Vanuaca reported, not just in the capital city of Suva but also in the countryside. Deposits have stopped coming in, and as money grows tighter, credit union members are asking for loans for simple purchases like food. According to Vanuaca, many of the island nation's credit unions are now operating off their reserves to provide the services for the members. It took almost three weeks for Credit Union Times to get through to Vanuaca, who said that power outages were now the norm. Land owners control the hydro power in Fiji and have shut off the source. Electricity is now being provided by diesel fuel and only for limited hours during the day. The situation as of Credit Union Times' last contact with Vanuaca was not hopeful. Demands for certain people to be in the new government will probably not be acceptable to other nations. Vanuaca said he fears a trade embargo which will increase the problems of his tiny nation. -...

MOUNDS VIEW, Minn. - Liberty Online, one of the credit union movement's leading Web hosting and design providers, has shaken hands on a partnership with Universal Pensions Inc. (UPI), as a remarketing agent of UPI's Internet-based IRA Service CenterT. Universal Pensions, based in Brainerd, Minn., developed the IRA Service Center to provide financials with the necessary components to attract and retain the significant dollars in retirement plans that are eligible to be rolled into IRAs. These components include: complete interactive ITA forms suite with forms selection logic capabilities; Roth and traditional IRA planning tools; an educational module with help text; and an information tracking database that provides a secure database for the credit union to capture member data. UPI provides services to more than 1,300 credit unions, including 76 of the top 100 CUs. Liberty Online and UPI have about 40 credit union clients in common....

SAN DIMAS, Calif. -WesCorp has become the first corporate credit union to have all expanded investment authorities allowed under NCUA Rules & Regulations. At the July NCUA Board meeting, NCUA gave WesCorp approval for expanded investment authorities under Part III of Part 704 Appendix B of NCUA's Rules & Regulations. The expanded powers gives WesCorp the regulatory authority to expand its investment and derivative activities with more qualified non-US entities. "This is a real opportunity for credit unions holding some $55 billion of Treasury/agency debt to diversify their holdings and pick up a considerable increase in yield," said Robert Burrell, senior vice president and chief investment officer for WesCorp....

ALBANY, N.Y.-MemberTrade Financial Group LLC, the wholly-owned CUSO of Empire Corporate that specializes in meeting the investments needs of credit unions has just turned the corner on its first year, said Lee Ann Palladino, president and CEO. "As a brand new entity, I'm happy with the way things have worked out. It's been very exciting," said Palladino. Membership levels in MemberTrade have really started to pick up, she said, adding that 1999 saw many CUs distracted by Y2k preparations and liquidity issues. Now, with lending up at CUs, many have chosen shorter-terms investments. "The brokerage business will always have an ebb and flow to it; it's predicated on the marketplace and money supply," said Palladino. "Other times, that will reverse. But there's no downside for us: credit unions are in business to make loans, and ultimately, that's good for us, too."...

SAN DIEGO-CUNA's Center for Professional Development will hold its Economics and Investments Conference here at the Wyndham Emerald Plaza Hotel on August 20-23. Designed by CUNA and CNBS, the CUNA Mutual Group and the CFO Council, the general sessions and keynote speakers were selected to give attendees the necessary understanding and tools to cope with today's competitive marketplace, said CUNA's Tom Dunn. What would an economics confab be without a forecast of things to come? It's on tap, along with a look at strategies to deal with prompt corrective action (PCA) issues and trends and tips from a bevy of CU portfolio managers from large-asset credit unions. Learn more at (www.cuna.org/training.html). -caburger@cutimes.com...

SAN DIEGO-LPL Financial Services (Linsco/Private Ledger) has been awarded the Crystal Pyramid award from DALBAR' Inc., a leading financial research firm. The recognition means that LPL is the number one third-party marketer in overall customer satisfaction, according to a written statement. "The financial institution market is extremely important to us," said James Norwood, VP of FI Services for LPL. "We are committed to providing financial institutions a means to differentiate themselves in a highly competitive industry." Unlike other investment houses, LPL does not develop its own investment products. It claims the firm's professionals can then provide truly independent advice....

WASHINGTON, D.C.-The National Association of Credit Union Service Organizations (NACUSO) will hold its Fall Leadership Conference and Workshop here on September 20-22 at the Renaissance Washington D.C. Hotel. Among key discussion points is the role CUSOs play in the credit union mix and how best to sustain success once it is achieved. Other key areas to be considered are: understanding the competition, organizational regulations, business operations, insurance sales and marketing. Because the focus of the workshop is insurance, several presentations will be made on long term care and disability coverage. There is also a breakout on acquiring insurance brokerage operations. To learn more visit the NACUSO Web site at (www.nacuso.org)....

I just read Mike Welch's column, "There's great CU talent under that glass ceiling (CU Times, July 5) regarding the good, old glass ceiling. I see myself in his statement, "the sharpest and most capable credit union executives are the hundreds of women on senior management teams of the nation's highest profile and most successful credit unions." I have applied for a number of CEO positions at all size credit unions and never been granted an in-person interview. While I understand that there are many fine applicants for these positions, I am amazed at the credit unions and search firms that call me based upon my resume, but do not schedule an interview. I believe the call is based on the perception that my name belongs to a man. The initial telephone contact puts that assumption and my opportunities to rest. Thanks for seeing the truth. Now I feel better. C. Lee Brice Vice President Operations and Marketing Desert Schools Federal Credit Union....

I'm writing in response to the letter to the editor, "The Golden 1 is not the competition" from Henry Wirz, president, SAFE CU that ran in the June 28 issue of Credit Union Times. Only from the president of another nearly billion dollar asset credit union would I expect to read such words!! Absolutely amazing! In the words of the late Martin Luther King, Jr. "We begin to die when we become silent about the things that matter." George Davis CEO California State & Federal Employees #20 CU...

The Problem When Karen and Jeff saw what they hoped would be their first home, they began looking for a mortgage lender. Both knew that their credit had been less-than-perfect in the past, but having seen and heard all kinds of ads that read, "even if your credit is really bad, you can get a mortgage," Karen and Jeff didn't think there would be a problem. Their credit wasn't really bad anyway. Or that's what they thought before they spoke with Mark. Mark came highly recommended by the real estate section of their Sunday paper. In a mortgage brokers' ad, that is. Mark promised he'd get them the best rate possible, and Karen gave him their social security numbers so he could run credit. Mark called back later that day and said their credit was terrible. Most lenders wouldn't even consider giving them the loan. It was going to be tough, he said, but he would pull it through for them. Gratefully, Karen and Jeff signed the application, paid an application fee and asked about interest rate. "I'll let you know in a few days," Mark told them. Over the next two weeks, Mark asked for all kinds of documents, but refused to answer the rate question. When Jeff finally reached a processor at the brokers' office, he found at why. "16.75%!" he told Karen. "There's no WAY I'm paying that!" Jeff was ready to back out, but Karen said, "We've come this far, let's just get the house. Mark said we can refinance later, and I'll take another part-time job." But when they got to the closing table, even she had second thoughts. The 6 points no one had informed them of just about cleared all their savings. Reluctantly, they signed the closing documents, mentally balancing a payment they could not afford with all their other debts. Why is any of this your business? Because Jeff and Karen are members of your credit union, and now have more debt than they can handle. Both will soon be behind on their car loans, not because of overspending, but just to keep a roof over their heads. Or, they'll pay their other bills and let the house go into foreclosure. Either way, two members who were getting back on their feet were thrown way off. And yes, you could have done something to prevent it. Just going above the standard interest rate doesn't make a lender "predatory." There are consumers who don't fit conventional guidelines but have a need for real-estate loans. Predatory lenders are those who mark up interest rates significantly, charge excessive rates and fees, and are not interested in the borrowers' welfare. If a lender sees the consumer is uncomfortable with monthly payments, he should not push her into the loan. Sometimes it's better to wait a year or two before buying a house, and an honest lender will explain that to consumers. Sub-prime lenders are up-front about rates, fees, and terms of the loan. Predatory lenders are usually not. Solutions While many credit unions don't get involved in sub-prime real estate lending, there are several things that can be done to make sure your own members' assets don't become a broker's assets. By educating members on what to look for in a lender, you may be able to avoid much aggravation and loss. Credit unions' newsletters are perfect vehicles for articles about what to do if credit is an issue, and members who use the advice will be appreciative that you've brought it up. Your newsletter, after all, is more than a marketing piece. It's an educational tool that can help members become increasingly financially savvy. Another idea is to have someone on staff volunteer to review documents members get from other financial institutions. This staff member can give objective advice, and let members know that the credit union not only wants their business, but also is concerned about their overall financial welfare. Had Jeff been able get a credit union loan officer on the phone with Mark, he may have forced Mark into giving him "an idea" of where the rate was. He could have had someone take a close look at his loan disclosures and been clearer on points and fees they were being charged. If your credit union can offer sub-prime loans, that's going to be the best deal for members, guaranteed. But if you can't, it may be worth doing a little research into lenders who do. By referring members to other institutions, you can protect them from unnecessary high fees and interest rates. To take it a step further, look at the loans your credit union is denying now. If the number is significant, it may be time to sign up with a lender who will allow you to originate the loans you can yourself, while they will do the rest for you. A program like this should explicitly state that there is no risk to the credit union in these loans. Rate: how high is too high? Since Jeff and Karen didn't qualify for conventional financing, their mortgage application presented a greater risk than a member who was never 30 days late in their life. At the same time, you have to wonder, how should you know if the rate is "right"? Is 15% too high? Is 9.5% okay? There is one simple answer to this question. If your member can get a better rate elsewhere, the rate is too high. When you apply for a car loan, you may be happy with the rate the dealer quotes, until you see a lower one advertised down the street. Provided the terms of the loan are still the same, the rate you were happy with just became too high. Fees, not only interest rates, should be examined. Different factors, such as pre-payment penalties may effect the rate, too. Does an interest rate make sense? Only by looking at the full picture will you be able to make that call. Another consideration should be government loans. Veterans are eligible for 100% financing, and credit guidelines are lenient. FHA is widely available, requires only 3% down and common sense underwriting is used. Since FICO scores are not the sole criterion, loans that essentially "make sense" but don't meet guidelines can be approved at an interest rate close to conventional loans. In looking for a sub-prime lender with lower interest rates, look for one who will offer government loans, too. Taking the time to research sub-prime lenders, educating your members on the subject, or originating these loans is one more thing that differentiates credit unions from all the other "ducks" out there. And all the Karens and Jeffs of your credit union will come in to thank you. They'll trust you, and wouldn't dream of doing their financial business anywhere else....

There's a lot of FDIC-inspired talk in Washington, D.C. these days regarding the doubling of the federal deposit insurance coverage from $100,000 to $200,000 per individual account at federally-insured deposit financial institutions. The conversation so far has centered on the benefits such a move would bring to the various insuring agencies, those financial institutions that are under their collective umbrella, and individual consumers receiving the added protection. As the rhetoric has become more lively, it has inspired proposed studies, legislative initiatives, and regulatory discussion. In reality, however, the raise-the-insurance-coverage proposal is generating far more questions than answers, especially for credit unions. The most obvious of these questions is, "Why do it?" Does anyone in credit union land actually know how many of the approximately 80 million credit union members have $100,000 in a credit union account? More to the point, how many credit union members would put as much as another $100,000 in their CU if it would also be covered by deposit insurance? I confess I don't have any idea, but my gut feeling is that the number of depositors at that level in the typical credit union is pretty miniscule. If I'm correct, why would credit union interests even get involved, let alone have industry lobbyists push for the increased coverage? For one reason, if it goes through and all financial institutions except credit unions provide the additional coverage, credit unions could find themselves at a competitive disadvantage. Also, with only credit unions remaining at the $100,000 threshold, a perception could be created that credit unions are either second class organizations or worse, not as safe as competitors. On the other hand, if credit unions get swept up in the move to increase the basic insurance coverage amount, credit unions could be looking at some negative fall out. For example, part of the package under discussion involves merging the various insurance funds. That could include the credit union fund. Carrying that scenario a step further, in the eyes of some politicians and competitors at least, that might make credit unions appear to be just like banks. After all, banks and credit unions covered under a super insurer dominated by massive banking industry assets, would not bode well for the, "but credit unions are different," argument. It wouldn't be long before the government merger thought process would go the next step. If a merger of the insurance funds is such a good idea, then why not merge the regulatory agencies as well, including NCUA? At that point, credit unions would have a major front burner problem to face. Think about it. With one government agency insuring all financial institutions, and one government agency regulating all financial institutions, it wouldn't be long before some bureaucrat would start waving the "cost-cutting" flag and propose that a single charter for all financial institutions would make sense. After all, the precedent for one size fits all has already been established. Interesting that such a potential disaster for credit unions actually started out as a seemingly simple trial balloon floated by FDIC Chairman Donna Tanoue last March. Such are the ways of Washington, D.C. But there's even more to consider from a credit union viewpoint. It has to do with attempting to fix something that isn't broken. Putting it another way, the credit union share insurance fund is in great shape. Regular refunds, rather than annual premiums, because the CU fund reaches and exceeds the statutory percentage requirement for funds on deposit, to name one. No clamoring by anyone connected with credit unions, especial CU members, that the added coverage is really needed, to name another. The bottom line is that Congress is not known for bestowing goodies without getting something in return. The goodies in this case is getting a federal guaranty up to $200,000. Some might also feel a goodie is making smaller financial institutions more competitive against their behemoth brethren The getting something in return part could take the form of higher premiums, or a plethora of tie-in regulations regarding, for example, privacy, Internet policies and procedures, predatory lending, loan limits, even more onerous Community Reinvestment Act (CRA) provisions, etc. Uncle Sam doesn't give anything away without strings attached. Is it all worth it? The more the original Tanoue proposal takes on a life of its own, the less worthwhile any change seems to be of any real benefit to both financial institutions and the consumers they serve. A brief history lesson may be in order. About 20 years ago, the coverage was upped from $40,000 per individual account to $100,000. There are still those in financial circles and in Congress who vividly recall one of the consequences of that move. It's called the savings and loan disaster. No, the coverage itself didn't cause the collapse of an up-to-then important sector of the financial services industry, but it did aid and abet it. Having a more-than-double safety net encouraged bad managers to practice bad management. So we make mistakes, the conventional wisdom went at the time. Don't worry, the insurance fund is there to protect us. Among the many reasons cited for the collapse of the S&L industry and the costly bailout, bad management is at the top of or near the top of everyone's list. So what makes sense out of all this for credit unions? Put simply, credit unions need to proceed with diligence and caution as the $200,000 proposal moves slowly along. Credit unions shouldn't aggressively push for it, but neither should credit unions outright reject it, especially if passage and implementation of the higher insurance limit becomes inevitable. That is, unless the strings attached start to look more like chains, and if insurance fund and regulatory agency mergers become part of the lexicon. If that happens, the entire credit union industry needs to run for the nearest pulpit to preach anew the credit union difference. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail mwelch@cutimes.com....

"By offering ISP services to members, credit unions create a new revenue stream, broaden and enhance member relationships and help drive online strategies by providing affordable access to credit unions' electronic services... ."...

University & State Employees Credit Union, San Diego, has named Sherman E. Palmore Community Outreach Director. Telco Community Credit Union, Tacoma, Wash., has named Jennifer L. See vice president of marketing. Redwood Credit Union, Santa Rosa, Calif., has elected the following officials to its board of directors: Debra Watts, chairman; June Steeves, vice president; Robert Wieck, secretary; Dave Imoto, treasurer; Harold N. Marsh, director; Greg McGuirk, director; Kathleen Sowers, director; and Patricia Van Tuyl. In addition, the following officers have been appointed to the Supervisory Committee: Steve Sharpe, chairman; Robert Steele, secretary; and Louis P. Funk, director. National Association of Credit Union Supervisory & Auditing Committees, Del Mar, Calif., a national trade association serving credit union supervisory and auditing committees, has elected the following members to its board: River Valley FCU Supervisory Committee Chairman Constance Brown, chairman; Government Employees Credit Union of Florida Chairman Linda Treml, vice chairman; Communicators FCU Chairman Curtis Parkerson, secretary; Tower FCU Supervisory Committee Chairman Russell Stephenson, treasurer; San Diego County Credit Union Supervisory Committee Chairman Peggy Gustafson Smith, director; New London Telephone FCU Supervisory Committee Chairman Vicki Anderson, director; First Atlantic FCU Supervisory Committee Chairman Jeffery Bongard, director; Harborstone Credit Union Supervisory Committee Chairman Larry Dralle, director; and Municipal Credit Union Supervisory Committee Chairman Joseph Guagliardo, director. In addition, NACUSAC has awarded Prince George's Employees FCU Supervisory Committee Chairman Charles Deegan the 2000 Golden Service Award for standing out as an example of what a volunteer can contribute to his credit union. NACUSAC has also recognized Orth, Chakler, Murname & Company, CPAs as Associate Member of the Year. The Florida accounting and auditing firm was selected based on its dedication and professionalism in working with credit unions across the country....

USAlliance Federal Credit Union, Rye, N.Y., has named Alfred Scipio senior vice president of marketing and business development. Constitution State Corporate Credit Union, Wallingford, Conn., has appointed David E. Addison president and CEO. Chartway FCU, Virginia Beach, Va., has named Kimberly Oates vice president of retail. Virginia Credit Union League, Lynchburg, Vice President of System Services Terry Childress has been elected vice chairman of the CU24 board of directors. Also elected to the CU24 board are Campus USA CU President/CEO Larry Scott, chairman and Mississippi Credit Union League's Mansel Guerry, secretary-treasurer....

South Carolina Federal Credit Union, N. Charleston, has appointed Rodney E. Druschel, director and Jeff A. Brodt, director to the Supervisory Committee. In addition, SCFCU has elected Rick Buckner director. Bay Gulf Credit Union, Tampa, Fla., has named Peggy Yenny manager of information technology....

Clarke American, a financial institution check provider, has announced that Redstone FCU located in Huntsville, Alabama has selected Clarke American as its new check provider. Mortgage Insurance Companies of America, has named Radian Guaranty, Inc. Chairman and CEO Frank P. Filipps president. First Data Resources U.K., an independent third party processor, has named Gerald E.R. Hawkins chief executive officer. Shay Financial Services, Inc., has named Michael E. Thomas manager of the company's CD desk. FIData, Inc., a provider of loan approval services, has named Richard Elmore vice president of sales....

HARAHAN, La. - Edgar L. Fontaine, president/CEO of Louisiana Central Credit Union died July 14 from a heart attack. He was 83 years old. Fontaine served as president/CEO of Louisiana Central CU from 1947-2000. He also served as president/CEO of the Louisiana Credit Union League from 1947-1987. Funeral services for Fontaine were held July 18....

Metz/McKennan FCU, Sioux Falls, S.D., President Ron Peters has helped raised over $2,000 for the South Dakota Credit Union League by creating and donating scrolled sawed clocks. This year Sioux Empire FCU Chairman Bob Himrich and his wife Jane were the successful bidders. For the past four years, Peters handmade clocks have been successfully auctioned at the League's annual meeting. Metz/McKennan FCU has $17.3 million in assets and serves 6,490 members. People's Alliance Federal Credit Union, Hauppauge, N.Y., has donated its employees time to participate in Long Island Volunteer Experience 2000. Volunteers assisted with lawn restoration around the bulk heading of Hecksher State Park's boat ramp to prevent erosion. PAFCU has $130.6 million in assets and serves 37,199 members. Navy Federal Credit Union, Vienna, Va., has raised over $25,000 for the American Cancer Society's Relay for Life. Team Navy Federal consisted of staff, family and friends from 15 branch offices nationwide. A total of 175 team members laced up walking shoes and did laps in the fight against cancer. The teams' fundraising efforts included car washes, bake sales, raffles, and selling Relay for Life moons and stars pledge cards at the branch offices. Navy Federal has $11 billion in assets and serves more than 1.9 million members....

Columbia Credit Union, Vancouver, Wash., has announced the relocation of its Orchards branch. The new location will be in the Albertson's Home Base Shopping Center at the corner of SR500 and 4th Plain Blvd. The branch is scheduled to open August 2000. In addition, the Association of Professional Mortgage Women (APMW) recently honored CCU's Assistant Vice President-Real Estate Lending, Bart Wescom, as Employer of the Year. CCU has $356 million in assets and serves 49,892 members. Clyde-Findlay Area Credit Union, Ohio, has awarded PWCampbell with the contract to design and build its new 3,700 square foot branch office at State Route 12 in Findlay, Ohio. Construction is scheduled to be completed in the fourth quarter of 2000. Clyde-Findlay Area CU has $65.5 million in assets and serves 13,856 members. Jax Navy FCU, Jacksonville, Fla., has recently held a ground breaking ceremony for its new Eagle Harbor and Arlington branches. The architectural firm Reynolds, Smith and Hills, Inc and contractor Dana B. Kenyon Construction Company have been selected to oversee the project. At the end of this year, the 7,750 square foot Eagle Harbor branch and phase one of the new Arlington branch are scheduled to be completed. Phase two of the Arlington branch will be finished for the grand opening in first quarter 2001. Jax Navy FCU has $1.7 billion in assets and serves over 245,000 members. Chicago Patrolmen's Federal Credit Union, has announced the grand opening of its new facility located at 1359 West Washington Street. CPFCU has $89 million in assets and serves 14,836 members....

Educational Community Credit Union, Jacksonville, Fla., has selected Rick Vecruysse "Employee of the Quarter". A veteran fraud investigator, Vecruysse also regularly takes the time to help those family members who have been victimized by the growing problem of fraud. ECCU has $420 million in assets and serves 67,241 members. Michigan Credit Union League, Northville Township Chairman Diana Nash and MCUL District VIII Director Lon Bone have been awarded the Distinguished Service Award. Recipients of the Distinguished Service Award are also inducted into the Michigan Credit Union Hall of Fame. In addition,the Michigan Credit Union Foundation has honored Research Federal Credit Union and its President/CEO Catherine Roberts with the International Credit Union Development Award. The award recognizes those credit unions who expand and strengthen the credit union community internationally and inspire other to follow suit. Army Aviation Center FCU, Daleville, Ala., has been awarded the Gold Addy Award for excellence in marketing and advertising by Dothan Advertising Federation. The award winning billboards promote the credit union's website and free Internet account access. AACFCU has $327 million in assets and serves 74,123 members. IBM Southeast Employees' FCU, Boca Raton, Fla., Southeast Services Organization President Barry L Hughes and Technology Senior Vice President Wendell Blakeley have recently graduated from the Credit Union Executive Society's CEO Institute. Admission into the CEO Institute is based on previous work experience, education and professional development. Graduates receive the title of Certified Chief Executive. IBM Southeast EFCU has $425 million in assets and serves more than 50,000 members. Virginia Credit Union League, Lynchburg, has won two first place honors in the Virginia Public Relations Awards sponsored by the Public Relations Society of America and the Richmond Chapter of PRSA. The League earned the Medallion Award for electronic communications with a budget less than $10,000 for its Daily News newsletter, a publication distributed via the Web and e-mail. Also earning a Medallion Award for publications geared toward an external audience was the League's reMember newsletter,which reaches approximately 600 credit union supporters. In its 53rd year, the Virginia Public Relations awards recognize the best strategic public relations campaign and projects of a given year....

United Teletech Federal Credit Union, Tinton Falls, N.J., has awarded six $500 college scholarships. Competing in a statewide credit union scholarship, recipients were selected based on scholastic achievement, extra curricular and community activities, teacher references, leadership qualities and written essays. Three scholarships were awarded from the Credit Union Affiliates of New Jersey's Youth Involvement Board and three were awarded from UTFCU. Local high school students Amish Babu, Matawan Regional H.S.; Gunjan Verma, Freehold Boro H.S.; Sunjay Mishra, Freehold Boro H.S.;Neel Tushar Shah, High Technology H.S.; Jeffrey Eng, Manalapan H.S.; and Heather Tatarski, Wall H.S. were presented with their certificates during their graduation ceremony. UTFCU has $192 million in assets and serves over 25,000 members. South Jersey Federal Credit Union, Deptford, has awarded six $250 scholarships to high school seniors Rohit Chopra, Eastern Regional H.S.; Alfred Fatale, Triton H.S.; Natalie Licketto, Haddon Heights H.S.; Fa'lynn Milligan, Woodrow Wilson H.S.; Katherine Wolk, Sterling H.S.; and Adrienne Worall, Overbrook Regional H.S. Applicants were judged based upon their academic performance, extra curricular and community activities, essay questions and teacher references. SJFCU has $97.5 million in assets and serves 46,081 members. IFF Employees Federal Credit Union, Union Beach, N.J., has awarded its tenth annual scholarship to Jacklyn Ann Corley in the amount of $1,000. Corley was selected based on her scholastic achievement, extra curricular and community activities, teacher references, leadership qualities and written essays. IFFEFCU has $9.3 million in assets and serves 2,371 members. Florida Commerce Credit Union, Tallahassee, has awarded three high school seniors a total of $5,000 in college scholarships. Winners were selected based on academic achievement, extracurricular activities, community involvement and essay responses. This year's award recipients are Godby H.S. senior Kelley Wiley Ballentine, $2,500; North Florida Christian School senior Kaitlin Ann Godwin, $1,500; and Rickards H.S. senior Ross Harmes, $1,000. FCCU has $105.3 million and serves 20,729 members....