Robins Federal Credit Union, Warner Robins, Ga., has awarded five high school students each a four-year, $4,000 scholarship. Named "Most Excellent Senior Team", the five graduating students, who are also credit union members, were selected based on academic performance, community work and extracurricular activities. This year's team consists of the following students: Jennifer Anderson; Carla Bland; Heather Jones; George Parker; and Carolyn Perry. RFCU has over $500 million in assets and serves over 123,000 members. U-Lane-O Credit Union, Eugene, Ore., has awarded three $1,000 scholarships to current Jumpstart Club high school seniors Lindsey Reynolds, Matthew Swinehart and Sara Ventura. Award recipients are chosen from U-Lane-O's Jump Start Club, a financial management club for young adult members. U-Lane-O CU has $360 million in assets and serves 52,438 members. American Eagle Federal Credit Union, East Hartford, Conn., in conjunction with the East Hartford Academy of Finance Program, has awarded a $500 scholarship to East Hartford High School senior Suelee Saynathone. AEFCU has $619 million in assets and serves over 100,000 members. Dupaco Community Credit Union, Dubuque, Iowa, has awarded five $500 Tri-State-Area College Scholarship awards to the following high school seniors: Matt Eggers, Cuba City H.S.; Sara Gerlach, Andrew Community H.S.; Molly McDonald, Dubuque Senior H.S.; Tara Nelson, Wahlert H.S.; and Joshua Tschiggfrie, Hempstead H.S. Teachers Federal Credit Union, Farmingville, N.Y., has awarded scholarships to six Long Island high school seniors. High school seniors William Jorch; Trisha Rossi; Christopher Kline; Bernard Kito; Andrew Smith; and Lauren Markowski were each awarded $1,000 for tuition at the college of their choice. TFCU has $870 million in assets and serves more than100,000 members. Wichita Municipal Federal Credit Union, Kan., has awarded scholarships to Anne Anderton, a Wichita State University student and Melissa Phillips, a Wichita Northwest High School senior. The scholarships are the first awarded through WMFCU's new youth programs. Each student has received $250. Applicants were judged based on grade point averages, extracurricular activities, community service, career goals, letters of recommendation and written essays. WMFCU has $33.3 million in assets and serves 7,019 members....

Xerox Federal Credit Union, El Segundo, Calif., has raised over $4,500 for breast and ovarian cancer research. Over 45 XFCU staff participated in the Revlon Run/Walk for Women event. In addition, XCFCU President/CEO Bill Cheney has been named "Professional of the Year" by the National Association of Federal Credit Unions in recognition of his 17 year service record in the credit union. AEDC Federal Credit Union, Tullahoma, Tenn., has raised $2,968 for the American Heart Association. The collective effort of the credit union's two teams, lead by Bobbie Jones and Melanie Bain, helped AEDC FCU place third out of the 13 businesses that participated. Bain was also named top individual fund-raiser overall. Eastern Financial Federal Credit Union, Miramar, Fla., has raised $10,134 for the March of Dimes. This represents a 20% increase over the previous year's contribution. EFFCU employees and members raised funds by selling stuffed Beanie animal toys, "Blue Jeans for Babies" casual day stickers and participating in WalkAmerica 2000. EFFCU has $1.1 billion in assets and serves over 150,000 members. CUNA Mutual Group, Madison, Wis., a financial services provider, has donated $100,000 to the National Credit Union Foundation, a charitable and fundraising organization for worldwide credit union development. The NCUF will use the donation to further its mission of improving the financial well-being of people. Since NCUF's inception 20 years ago, CUNA Mutual has donated more than $4 million of the $12 million total grant contributions....

Pennsylvania Credit Union League, Harrisburg, has awarded Service 1st Federal Credit Union CEO William J. Lavage the 2000 William W. Pratt Professional Lifetime Achievement Award and Norristown Bell Credit Union Treasurer Floyd Gladfleter the 2000 Joseph A. Moore Volunteer Lifetime Achievement Award. In addition, the PCUL has awarded the Dora Maxwell Award for Social Responsibility to the following credit unions: in the $200 million and over category, American Heritage Federal Credit Union; in the $50-100 million category, Cross Valley FCU in Wilkes-Barre; and tied in the $20-50 million category, CTCE FCU and Service 1st FCU. The PCUL has also awarded Cross Valley Federal Credit Union in Wilkes-Barre the first place Louise Herring Award for Philosophy in Action for CVFCU's commitment to teaching good money management to youths starting from the age of three through the college years. In addition, newly created this year, the Keystone Award, which honors an individual, credit union or organization that demonstrates particular excellence in credit union growth and leadership, has been presented to the founder of the Service Center for Credit Unions Inc., Joni Brown and creator of CU$, a no-surcharge ATM alliance, Pennsylvania State Employees Credit Union. Educational Community Credit Union, Jacksonville, Fla., has been presented the Commissioner of Education award for its role in the Duval County schools. ECCU has $400 million in assets and serves 64,361 members. Ste. Croix Regional FCU, Lewiston, Maine, President Vicki L. Stuart has been presented the James M. Gratto Award for Outstanding Credit Union Manager by the Maine Credit Union League. The award recognizes those individuals who have provided promise to Maine credit unions and their members. SCRFCU has $68.8 million in assets and serves 11,912 members. Riverside County Credit Union, Calif., has been awarded the Community Service Award for 1999 by the United Way of the Inland Valleys. RCCU has been recognized not only for its financial contributions and participation in the United Way's efforts, but for its diverse contributions and support of the community as a whole. RCCU has $275.4 million in assets and serves 64,274 members. Towers Federal Credit Union, Annapolis Junction, Md., has been recognized by Washington Consumer Checkbook magazine as scoring among the highest in service in the Baltimore-Washington area. Tower's overall service was ranked "superior" by 90% of the respondents and received a "superior" rating from at least 78% or greater in every category evaluated by the study. The categories included knowledge of staff, speed of service, pleasantness of staff, convenience of hours, reasonableness of fee policies, clarity of written communications and overall service. TFCU has $840 million in assets and serves 100,000 members....

ALBANY, N.Y. - Credit unions in the Empire State scored a major legislative victory June 12 on the final day of the state legislative session. Both the State Senate and Assembly passed the Field-of-Membership Parity bill (S.8061-a and A.7701-c, respectively), which revises the qualifications for membership in state-chartered credit unions to allow SCCUs to serve, with the approval of the State Superintendent of Banking, groups with multiple common bonds, similar to federal credit unions. Select employee groups that apply to join a credit union's field-of-membership cannot exceed 3,000 members unless the superintendent determines the group is unable to establish its own credit union. In addition, a credit union can extend membership to persons and organizations in an underserved local community, neighborhood or rural district that's determined to be an `investment area' as defined in the Federal Community Development Banking and Financial Institutions Act of 1994. The Senate bill's chief sponsor, Sen. Hugh Farley (R-Fulton, Montgomery, Schenectady and Saratoga counties), chairman of the Senate Banking Committee reiterated his support for credit unions and his position that parity for state-chartered credit unions with federal credit unions is important for them to compete. He promised to continue to work for that. The Assembly bill was sponsored by Assembly Banking Committee Chairman Aurelia Greene (D-Bronx). The FOM parity bill also provides state-chartered credit unions more investment and deposit opportunities. Previously, a credit union was prohibited from selling or issuing shares to another credit union if the sale resulted in the aggregate amount of its shares held by other credit union exceeding 30% of its own capital. The measure removes this limitation. In another legislative victory for the New York State Credit Union League, a bill was passed that allows state and federal credit unions to establish pre-paid burial trust accounts for members....

WASHINGTON - Auto lending has always been a staple of credit unions' loan portfolios, a barometer of the state of the health of credit unions' lending activity. But the lending landscape has changed - there are more non-traditional financial service organizations competing with credit unions for members' loan dollars and a growing list of lending alternatives available for members to consider. These alternative auto loan products, such as auto leases don't have to compete with CUs' loans for new or used vehicles. In fact, say credit unions that offer the product, they can be magnets that draw members to other CU services. Credit unions are relative newcomers to auto leasing. They began offering the product in substantial amounts in the last `80s. According to CUNA's Economic and Statistics Department, only 1% of credit unions offered auto leasing in 1985. That figure has continued to inch up since and by 1999 it reached 12% of credit unions. By the end of 1999, credit unions' auto loan portfolios comprised 39.4% of their total loan portfolio. That's down slightly from a 10 year high in 1995 and 1996 of about 40%, and is higher than where it stood in the early nineties, around 33%. Credit unions' auto loans are not a shrinking business for credit unions, said Bill Hampel, CUNA chief economist. In fact, just the opposite is true. Credit unions' auto loan-to-asset ratio over the 10 years increased from 21.2% in 1990 to 26% in 1999. "Car leasing and auto loans are not interchangeable products," Hampel said. "A member who's decided they want to lease a car is not going to change their mind and take out a car loan with the credit union just because the credit union doesn't offer leasing. They're going to take their business somewhere else. The auto leasing market is huge." Juli Anne Callis, chief operating officer for American Electronics Association CU in Sunnyvale, Calif. agrees that, "Credit unions can't convert a auto lease prospect to a loan prospect. They are compatible, synergistic products." Callis explained that the $675 million credit union began offering the products to its members in 1996 as a way to build up the credit union's secured loan portfolio. Our members were also inquiring about the product and whether we offered leasing, she added. "They voted with their dollar," she quipped. "They suggested we get a leasing product or they'd go somewhere else for it." AEACU's auto lease product has not damaged the credit union's auto loan portfolio. Since the first of the year, the credit union added about $63 million to its auto loan portfolio and about 10% of that is from auto leases. Callis attributes the success of AEACU's auto lease program to the credit union's tendency to be "cautious" about who it approves for car leases and it targets A and B paper. She stresses that auto leasing is not for everyone and reiterated for those credit unions considering offering the service that, "Auto leasing does not cannibalize new and used vehicle lending." She noted though that the implementation of a successful auto leasing program requires a staff that's savvy about auto leasing. It's a business decision that has to be considered carefully. Leasing is an attractive way to capture your members, she said, and it's also a way to attract new members. "Credit unions that don't offer auto leasing may be missing out on a lot of eligible non-members," Callis said. When USA FCU decided to offer auto leasing to its 67,000 members six years ago it decided to go with a "lease look-alike product" that lets the $389 million credit union keep the lease on their books as a loan and offer a contract that guarantees the residual value of the car when the term of the lease expires. When a car lease term expires, the member can choose to either turn the vehicle in; sell the vehicle on the open market and pay off the lease; trade the vehicle in and pay off the lease; or refinance the car with a regular car loan. Jim Reinhart, vice president of member services said the look-alike lease product allows the credit union's members to get all the benefits of a lease product with lower monthly payments. In addition, since no leasing company is involved in the transaction, the vehicle is completely owned by the member for the length of the term. As of May 31, USA FCU's had completed about $27.2 million in auto leases, which accounted for about a quarter of the credit unions total auto loan portfolio. Reinhart advised credit unions considering offering auto leasing to "look at it is just one more option for members. If you don't offer it they'll go somewhere else for the product." -...

SAN ANTONIO, Texas - Unamiable, adversarial, mistrustful. Credit unions' relationship with auto dealers has been all of the above adjectives. Even with so much bad blood between them, a growing number of credit unions and auto dealerships have managed to bury the hatchet and cooperate in indirect auto lending relationships. Getting credit unions and car dealers to work together in indirect auto lending relationships isn't just difficult, "it's like turning the Queen Mary around," says Jim Phelan of Southwest Business Corp. (SWBC). "There's been a lot of competition in the past between credit unions and car dealers for members' auto loan. A successful indirect auto loan program requires a total turnaround in their attitude toward each other." In fact, the CU/auto dealer adversarial relationship is probably one of the most significant barriers to entry for more credit unions getting involved with indirect auto lending. Despite the odds, a growing number of credit unions are offering their members indirect auto lending. According to CUNA's Economics and Statistics Department in Madison, Wis., 11% of credit unions were offering the program in 1999. That's up from 6% in 1995. Sallie Sylvester, director of training and lending services for the Oregon Credit Union League told Credit Union Times that several credit unions voiced their concerns about whether auto dealers could be trusted when the league announced its partnership last year with CU Direct Lending in Rancho Cucamonga, Calif. Specifically Sylvester said the credit unions were concerned that dealers would try to sway the member away from taking the loan with their credit union and convince them to seek alternative financing through the dealership. To ameliorate credit unions' apprehensions, Sylvester explained to them that CU Direct Lending representatives visit the dealerships regulatory to build relationships and she encouraged the credit unions to do the same. She also advised them to notify CU Direct Lending if a member ever notifies them that a participating dealer tried to steer them away from getting a credit union auto loan. In those instances, CU Direct Lending's policy is to send a regional manager to the dealer site and work with the salespeople there. Since the Oregon CU League began offering the program to its members almost a year ago, Sylvester said about eight credit unions representing 200,000 members have signed up for CU Direct's indirect lending program, "so that speaks for itself," she remarked. Trust between credit unions and auto dealers isn't the only obstacle blocking more credit unions from providing the product. Whether a credit union decides to go it independently and work directly with auto dealers or network with other credit unions and outsource the management of the product, there are still costs and a great deal of time involved in generating a legal agreement and hiring and training staff to work with the dealers and members. "All auto dealers have a lot of financing options they can offer a consumer, they're bottom line driven," said Phelan. "Credit unions have to realize that what's most important to the dealer is closing the deal while the member is there. That means time is of the essence in a credit union successfully holding the member's auto loan." Phelan advises credit unions to offer members pre-approved auto loans and work with auto dealers in their area on dealer participation and flat fee structure loans. He also suggests credit unions involved with indirect auto lending - either independently or with other credit unions - to heavily promote the product to their members. The more members there are shopping for a vehicle who know about the product, the more they'll request credit union financing when they make their purchase decision. SWBC has worked with credit unions setting up indirect auto lending programs both for those that prefer to offer them independently, as well as with other credit unions through a credit union league or CUSO. His strongest advice for credit unions either currently offering the product or considering it - "Be consistent, maintain your underwriting standards," Phelan says. "An auto dealer has to get a feel for the credit union's auto loan policy, how they're done. There's a saying in the industry, `What you did yesterday, you better do today. What you do today, you better do tomorrow.' A credit union involved with indirect auto lending shouldn't do any unusual loan behavior. If it does, they'll lose credibility with the auto dealer." -...

Educational Credit Union Council Executive Director Lorraine Webster reveals her secret to attracting hundreds to the annual conference...............Page 22...

ARLINGTON, Va. - Seven states which originally earned their NASCUS accreditation status in 1995 are up for re-accreditation this year. The states are: Idaho, Tennessee, Connecticut, Indiana, Utah, Kansas and Missouri. The NASCUS accreditation status means that the NASCUS Accreditation Review Team, the Accreditation Audit Committee, and the Performance Standards Committee have concluded that the states' credit union regulatory agencies meet the criteria necessary to fulfill their statutory responsibility to charter, examine, supervise and regulate the credit unions chartered in their state. To be accredited, an agency has to complete a time and labor-intensive process that includes the completion of a self-examination questionnaire that obligates the agency to analyze funding, training, agency personnel, its examination and supervision capabilities, and its legislative powers. Once accredited, agencies undergo annual review to maintain their accreditation for a period of five years. At that time, the agency must complete the entire accreditation process again to retain its status. In addition to the seven states, Louisiana was also eligible to be re-accredited and it's already completed the necessary process. At press time, 23 state regulatory agencies had earned NASCUS accreditation status....

The CO-OP Network will soon release a new SafeDebit product for members making purchases on the Web.......Page 4...

DALLAS - Resource One FCU has become the eleventh federal credit union in Texas to convert to a state charter since 1997 and the fourth so far this year. The state Credit Union Division approved the $151 million credit union's charter conversion application on May 31. Resource One initially applied to convert to a state-charter in 1997. It received NCUA approval to proceed with a member vote, but the credit union's board decided to put off the conversion pending the outcome of H.R. 1151. When The Credit Union Membership Access Act was signed into law in Aug. 1998, Resource One President Jim Brisendine said the credit union decided to proceed with the charter conversion because "H.R. 1151 places too many limitations on federal credit unions, especially concerning field-of-membership." He said the credit union is "considering" applying for a community charter. Resource One counts 319 select employee groups among its 48,000 members. It was originally chartered in 1936 as Sears Employees FCU. It went through a series of mergers with other credit unions and was renamed Resource One in July 1995. -...

Top 25 Credit Unions in Leases Receivable As of March 31, 2000 Note: NCUA started collecting lease data in September 1999...

ALBANY, N.Y. - The New York State Credit Union League Board of Directors has appointed William Mellin as the league's new president/CEO. Mellin assumes the position immediately. He replaces R. Wayne Diesel who held the position from 1998 to 2000 and who announced his retirement from the league last month (CU Times, May 31). Mellin comes to the league from CUC Mortgage Corp. which he's headed since 1993. He has held various leadership positions in the financial services industry since 1978. He is a member of the CUNA Mortgage Advisory Committee, CUNA's Lending Council, and the Mortgage Bankers Association....

KANSAS CITY, Mo. - Mazuma Credit Union recently held a safety clinic where the Kansas City branch of the National Center for Missing and Exploited Children photographed more than 60 children. "According to the United States Department of Justice, over one million children run away or are reported missing or abducted each year," said Mazuma CU Community Relations Director Dominique Campbell. "Since most parents do not have a clear head-and-shoulders photo of their child to give to the police in the event that the child is missing, Mazuma decided to assist with this problem." Free pictures were taken of Mazuma Money Bunny members and parents completed Photo Facts ID booklets which contains such emergency information as pediatrician's name, allergies and emergency contacts. The booklets belong to the parents and can be conveniently stored at home to update information. The Mazuma Money Bunny Club is offered to children up to age 12. To better learn the value of good saving habits children earn a Mazuma buck for every $5 they deposit into their Money Bunny account. Mazuma bucks can then be used to purchase Money Bunny prizes. As part of their membership children also receive quarterly newsletters, invitations to special events and a birthday card from Max the Money Bunny Club mascot. According to Campbell, Mazuma CU received a great positive response to the program. Mazuma CU has $196 million in assets and serves 47,077 members....

WASHINGTON - At press time, the House was expected to vote late in the day June 21 on a HUD-VA and Independent Agencies Subcommittee spending bill that would also set a $3 billion cap on the NCUA Central Liquidity Facility's (CLF) borrowing limit in FY2001. The cap was originally recommended to be rolled back to $600 million, but the House Appropriations Committee passed an amendment to its appropriation bill that raised the limit to $3 billion (CU Times, June 14.) John McKechnie, vice president of legislative affairs, CUNA said he was informed by House sources that "there was no sign of extensive debate on the amendment and no static, criticism or concern on it." After the House passes the spending bill, the focus will shift to the Senate side....

ARLINGTON, Va. - Ron Keeler, president of Lockheed FCU and chairman of NAFCU has announced his midterm resignation from his position on the association's board. Keeler gave as the reason for his decision his interest in putting more time into planning for his retirement from CU service. Keeler became chairman of NAFCU in 1999. He succeeded Jim Guretsky. Keeler will step down at NAFCU's annual conference in July. He'll be replaced as chairman by Jim Mills, president, Three Rivers FCU. Keeler has served on the NAFCU Board for eight years. According to NAFCU Board rules and regulations, board members can only be seated for nine years, so next year would have been Keeler's last year serving on the board....

BOULDER, Colo. - University of Colorado Federal Credit Union has named Bill Sterner President/ CEO. Sterner's background in the credit union industry includes management and consulting positions at the local, state, national and international levels. He served as U of C FCU vice president of marketing for three years and since December 1999 Sterner has been acting president and CEO. "His extensive experience, superb people skills and visionary outlook will provide excellent leadership for the credit union's future," said U of C FCU Chairman Ed Murrow. U of C FCU has over $344 million in assets and serves 61,000 members....

LOOMIS, Calif - After six months of working out details, Nazarene Credit Union and Sacramento District Federal Credit Union have merged and opened a new office here. With this merger, NCU has gained an additional $6 million in assets along with over 1,200 members in the Northern California area. "We're very happy to build on the strong foundation established by the SDFCU, and offer financial services to the members and churches that will help them enhance their stewardship," said NCU President Mendell L. Thompson. NCU has more than $112 million in assets and serves 15,645 members....

WASHINGTON - Alan Greenspan was formally sworn into his fourth, four-year term as chairman of the Federal Reserve Board June 20. Greenspan has served as the Fed chairman since Aug. 1987. He was nominated to his latest term Jan. 4 and was confirmed by the Senate Feb. 3...

BRIDGEWATER, N.J. - Ethicon Employees Federal Credit Union has changed its name to Financial Resources Federal Credit Union. Although still serving Johnson & Johnson employees, the name change reflects FRFCU's new Credit Union Service Organization, Financial Resources. The CUSO will offer stock and money market information, as well as mutual funds, annuities, online trading and insurance to members and non-members. According to FRFCU Marketing Specialist William D. Prystauk, the name change has been in the works a long time and was necessary to reflect the changing times. "Ethicon is a division of Johnson & Johnson, we wanted to show that the credit union serves all of Johnson & Johnson not just a specific division," said Prystauk. A contest was held by employees to choose the new name. FRFCU has $250.3 million in assets and serves 40,782 members....

SPANAWAY, Wash. - Bill Brandt, former president and CEO of Washington State Employees' CU in Olympia was seriously injured the morning of Saturday June 17 in a motorcycle accident. According to the Washington Credit Union League, Brandt was airlifted to Harborview Hospital in critical condition after his Honda ACE 1100 cc motorcycle unexpectedly ran off the road. Brandt and his two companions were reportedly traveling about 25 miles an hour on southbound State Route 7 when he failed to negotiate a turn and struck a guard rail. Brandt was thrown from the motorcycle over a 25-30 foot embankment. Brandt suffered a broken ankle, broken ribs and a punctured lung that required two immediate operations on June 17. He has undergone subsequent operations and is expected to undergo more surgery in the next two to three weeks. He is currently listed in stable condition at Harborview's intensive care unit and is expected to make a full recovery....

CALGARY, Alberta, Canada - The Alberta Credit Union System's six month results for the period ended April 30 showed the system reached new milestones in assets and net income. Canadian newswire reports indicated there was a 12% increase in assets compared to the same period last year and a 6% increase in the first half of this year. In addition net income before taxes and dividends were $27.3 million compared to $24.9 million for the same period last year, an increase of 10%. The Alberta Credit Union System also set a record $27 million in earnings that were returned to credit union members in the form of common share dividends and patronage rebates last year. With the recent acquisition of 17 Bank of Montral branches in rural Alberta, the number of communities in Alberta being served by credit unions has increased over the past six months. The Alberta Credit Union System, which is made up of 78 locally-owned and operated credit unions serving over 500,000 residents of Alberta, now has a presence in 117 communities throughout the province....

NEW YORK - Falling car prices, competition between insurers and safer vehicles are among the factors that drove auto insurance rates down for only the second time since 1973, says the Insurance Information Institute. Auto insurance rates fell by 3.2% in 1999; in 1998 rates fell by 2.8%. Other factors cited by III as influencing the rate decline are more skilled drivers on the road, diminished tolerance for driving under the influence and anti-fraud efforts by insurers and states. Auto insurance expenditure, which measures what the average consumer actually spends for insurance on each vehicle, continues to fall but slower than auto insurance rates, which reflect the price of specific types of coverage. Average auto insurance expenditure dropped an estimated 1% in 1999 compared with a drop of 0.4% in 1998 and an increase of 2.3% in 1997. -...

OKLAHOMA CITY - The Oklahoma Credit Union League is hailing the passage of a bill that was among the collection of credit union-sponsored measures passed by the state's 47th Legislature before it adjourned on May 26 and which will allow credit unions in the state to consult with members about prices and best rates for vehicles before they purchase them from dealers. H.B. 2051 was sponsored by state Rep. Jerry Hefner (D-12). It was signed into law by Gov. Frank Keating (R) on June 6 and is effective Nov. 1. Prior to its passage, only auto brokers were allowed to offer consumers assistance or advice regarding the purchase or financing of a vehicle. Credit unions were prohibited from providing this type of service because this was considered to be in conflict with credit unions' interest to increase their own auto loan portfolios, explained Debra Morrow Ingram of the Oklahoma Credit Union League. A preliminary step to introducing H.B. 2051 was passage of S.B. 1341. Among the provisions of that bill, it raised the percentage of CU assets which can consist of certain property from 5 to 7%. It also includes a definition of "interest income" that provides that it is not considered valuable consideration for negotiation services. That bill was signed into law April 13 and carried an emergency clause making it effective immediately. Morrow said both S.B. 1341 and H.B. 2051 sailed through the state legislature. Although the auto brokers took little notice of the measures before they were signed into law, Morrow said the credit union league anticipates lawsuits to be filed by the brokers once they become aware of credit unions' involvement in the service. She expects them to charge that credit unions' participation in auto brokering constitutes valuable consideration. "Now we have S.B. 1341 in our hands and we'll just wave it at them," Morrow said....

I enjoyed reading the Letters to the Editor ("Better for whom?", "Enough is enough") in the May 3 edition of Credit Union Times. I know Stuart Perlitsh and George Davis to be thoughtful CEOs; therefore, I was a bit surprised that they had joined the chorus of Cassandras who fear credit union competition. The issue of credit union competition is wildly exaggerated. I do not know whether Mr. Perlitsh and Mr. Davis know the competitive effect of The Golden 1 on their credit unions. I recently performed a study of SAFE Credit Union's competition, however, and would like to share that information with them. SAFE Credit Union is in The Golden 1's primary market area. SAFE and The Golden 1 compete for both the SEG market and the community credit union market. I think the following information dispels the myth that credit unions are major competitors for other credit unions. The Raddon Financial Group surveyed SAFE members in the Spring of both 1999 and 1998, and asked them to name their primary financial institution. SAFE was listed as primary financial institution by 49% of our members in 1999, versus only 44% in 1998, while 21% of SAFE members listed Bank of America and Wells Fargo Bank in 1999 versus 24% in 1998. The credit union most often listed by our members, The Golden 1, was selected by only 2.5% of members in both 1998 and 1999. I believe the member survey results support the conclusion that even in a market served by very competitive credit unions, there is plenty of opportunity for growth from banks that have alienated the consumer. The Golden 1 has 23 branches in SAFE's market area; SAFE has 10 branches. The Golden 1 advertises heavily in the local media. The Golden 1 has the largest local employers in its field of membership. It has a community charter for all of the local counties, with a potential local membership of two million members. It prices its shares and loans very competitively. Despite all of those advantages, The Golden 1 holds a relatively small primary share among SAFE's members. I encourage Mr. Perlitsh and Mr. Davis to stop worrying about The Golden 1. The large banks still have the bulk of the market share. Why? SAFE's member survey clearly points to branch convenience as the one factor most likely to determine market share. Our member survey indicates that our members want convenient locations. The three most frequently cited reasons members keep their deposit balances elsewhere are based on branch convenience. Branch convenience is also important for loans (members cite inconvenient branch locations as the number one reason they do not borrow from SAFE.) The key for credit unions is to out-local the big guys and out-big the local guys. If location is as important as our research indicates, local credit unions should be able to have better locations than those of an out-of-town credit union. Competition from other credit unions is much more desirable than bank competition-at least the members are benefiting and the money stays within the credit union movement. A credit union that fears competition from other credit unions is probably already losing market share to other financial service providers. Competition does not preclude cooperation. We cooperate on many different projects with The Golden 1. The Golden 1 has done much to make the credit union system better. One last thought for Mr. Perlitsh and Mr. Davis: Be thankful that The Golden 1 has chosen to do business in 21 counties. Most of the credit unions it will overlap in membership will be 21 times more focused. I like those odds! Henry W. Wirz President SAFE CU...

When John Hancock signed the Declaration of Independence in 1776, he wrote his signature large-so large, the saying goes, "that King George would be able to read it without his spectacles." Under the new E-sign legislation (The Electronic Signatures in Global and National Commerce Act) passed by Congress, John Hancock could have signed it electronically ensuring that there would be no doubt in King George's mind that not only was it signed by John Hancock but also the copy of the Declaration of Independence was unaltered and genuine. We are in a Revolution. E-sign is here and it's getting fair play in the popular press. Financial service companies everywhere are gearing up to offer a complete electronic experience for those consumers ready to try it. Vendors of services have already started their ad campaigns and conferences. Some lawyers are already wringing their hands about how vague the law is, while others are applauding the flexibility this law bestows. One thing is for certain; there is no going back. Credit unions need to make this electronic revolution work for their members. It has the potential of lowering expenses, providing better member services and faster introduction of new products and services. But like any revolution if you don't execute your plans well you lose. Where do you begin? You need to make an honest assessment of your credit union's overall eCommerce capability. E-sign, while a crucial and necessary component of an overall member-focused remote delivery strategy will only be useful if all the other pieces are in place and working. Thus, before you start talking to vendors about their latest and greatest eCommerce offerings, or signing up for conferences on how this new authority will finally set you free, review and update your technology plan. If your plan doesn't have components for: * online sign-up of new members, * opening of various accounts, * an interactive set of loan applications (for all your loan types), * basic home banking functionality (account inquiries, downloads, and transfers), * automated loan decisioning on at least one type of loan account, * delivery of members' statements electronically, * electronic storage of documents, then now is the time to make plans to add these components and integrate the E-sign capability. With your plan revised, it's time to start reviewing all the information you'll be receiving from your trade associations, lawyers, examiners, CUMIS Risk Management, your data processor, your Internet/homebanking software provider, your forms and ancillary systems providers. Will it be clear and lead you, with absolute certainty to an elegant solution. not a chance! But that's OK, we have been asking Congress and our regulators to give us more freedom and not dictate how we solve our business and technology problems. We did not want Congress to dictate a specific type of technology to be use in retaining, disclosing or signing documents electronically. E-sign provides no safe harbor by specifying the type of hardware or software to be used. It also forbids any regulator from requiring that a certain technology be used. Congress correctly recognized that technology will change must faster than it can react. Congress also believes there are sufficient market forces in place to "regulate" behavior. Nevertheless, Congress has put in some very minor safeguards for consumers such as verifying that the member can receive the disclosures electronically and the consumer does agree to receive these disclosures electronically. Since there is no requirement to use a specific technology your criteria will include: * ease of use by your members, * cost acceptable to implement, * ensures member privacy, * works across all your product and service offerings (e.g. credit card, mortgage), * renders the contracts signed irrefutable. Challenges and Opportunities The prospect of fully implementing digital signatures in the credit union system presents both benefits and costs. The costs consist mainly of: * Institutional overhead: The cost of establishing and utilizing certification authorities, repositories, and other important services, as well as assuring quality in the performance of their functions. (It's not clear who will come forward as the leading Certificate Authority for credit unions). * Subscriber and Relying Party Costs: A digital signer will require software, and will probably have to pay a Certification Authority some price to issue a certificate. Hardware to secure the subscriber's private key may also be advisable. Persons relying on digital signatures will incur expenses for verification software and perhaps for access to certificates and certificate revocation lists (CR.) in a repository. On the plus side, the principal advantage to be gained is reliable authentication of documents and disclosures. Digital signatures, if properly implemented and utilized offer promising solutions to the problems of: * Imposters, by minimizing the risk of dealing with imposters or persons who attempt to escape responsibility by claiming to have been impersonated; * Contract integrity, by minimizing the risk of undetected document tampering and forgery, and of false claims that a document was altered after it was sent; * Total Remote Delivery, by adding the ability for your members to sign documents and receive disclosures digitally members will no longer be delayed in joining, opening new accounts or getting a loan by a requirement of a wet signature. Here are a few questions you need to ask yourself as you review your plan of attack: Can I wait and see what my competitors are going to do? Will the members want it? Do I have all the information I need to make the decisions? How will my examiner react? How will I promote its use to the members? Do I have the right kind of insurance coverage to protect the credit union when something goes wrong? Can the credit union afford it? In the next few months you'll be offered a lot of answers to these questions. Don't delay in answering them....

Credit unions people spend a lot of time debating common bond and field-of-membership issues, almost as much time as the banking industry and state and federal credit union regulators. What a colossal waste of time! There is no point in repeating here all the monkey business that credit unions must endure when they seek to grow. Or even the inconsistencies within NCUA regions related to the lengthy and convoluted approval process to make membership changes. They are well documented and in the news every day, usually in articles reporting on charter conversions. Instead, I suggest the terms be banned from the credit union vocabulary. Only one credit union leader has had the courage to come right out and address the topic of common bonds and fields-of-membership. Doug Duerr, CEO of the National Association of State Credit Union Supervisors (NASCUS), recently stated flatly that the terms no longer make sense, if in fact they ever did. Of course there are many individuals both within and outside of credit union land that would disagree with his assessment. By now Duerr has probably caught a lot of flack. He shouldn't. If credit unions are such a wonderful thing, and they are, I agree with Duerr that as many people as possible ought to have the opportunity to join one. As a matter of fact, my personal vision for credit unions has long been that I won't be happy until every man, woman, and child in this country who wants to join a credit union can do so. Do I have all the answers on how to accomplish that vision? No, but I think achieving such a goal is something that should be top priority for every credit union and all credit union leadership. For starters, like Duerr, I have long felt that individual credit union policymakers should be able to decide who can belong to their credit union. Certainly that decision shouldn't be dictated by outsiders such as the banking industry. Nor by uninformed politicians who notoriously vote for what's best for themselves rather than what is best for their constituencies. Nor should who can belong to a credit union be arbitrarily decided using outdated, inconsistent, and artificial parameters as the regulators are currently doing. Stepping outside of credit unions for a moment, most Americans are familiar with a huge (34 million members) not-for-profit national membership organization called the American Association of Retired Persons (AARP). Many credit union people are members. They know the types of services that AARP provides its members. They may even know that from the day it was founded by Ethel Percy Andrus of the California Retired Teachers Association in 1958, the organization competed with the private sector. Yet, AARP has never paid federal taxes. As a not-for-profit, it continues to this day as a tax-exempt organization. It is also fairly well known that the group was started because of discrimination. Andrus was outraged that insurance companies discriminated against older people. She decided to take matters into her own hands. Today AARP is regarded as among the most powerful and influential lobbies in the country. As its name makes clear, 42 years ago AARP set out to serve Americans over the age of 65, at that time considered the normal retirement age. Hence the name the American Association of Retired Persons. As the organization grew and began offering more and more products and services of interest and value to older Americans, something else was also changed. AARP was so successful serving those 65 and older that its leaders decided, why not extend our reach? The rules were changed to serve persons 60 or older. Then 55 or older. Then 50 or older. At its most recent national convention held in Orlando, Florida, one of the major agenda items was "how can we attract and serve younger people?" Maybe 45 or older? Or 40? Or? Another important discussion centered around the need to change the organization's name to more accurately reflect who it serves and what it does. (Sound familiar?) Despite all these major changes, past and future, AARP is still tax-exempt. In fact, the subject of AARP's tax-exemption never comes up. Why not? Because all AARP did was change its membership qualifications. On its own, without government help or influence, AARP's leadership decided whom they wanted to serve. They didn't change any common bond (retired persons) or field-of-membership (persons over 65). They simply decided to change the membership qualifications. Turn now to credit unions. Duerr and the many credit union leaders who agree with him, but don't have his courage to step forward, is not suggesting that credit unions be thrown wide open to the general public. What he is suggesting is something that individual credit unions have the right to determine their own membership qualifications. If a credit union's leadership determines that it can serve a particular geographic area, or certain group of people by profession, religion, hobby, or whatever, they should be allowed to do so. Of course, where the regulator must still come into play is making certain that the credit union can prove that it can do what it sets out to do without affecting the safety and soundness of the credit union. Basing whom a credit union can serve by letting the credit union itself determine its own membership qualifications makes so much more sense than the complicated mess we currently have. It's just plain silly to make membership decisions based on, for example, 25 mile barriers and expansion by counties or ZIP codes. No wonder there is so much confusion regarding whether a credit union is a SEG credit union, a community credit union, or a hybrid. Allowing a credit union's leadership to operate in terms of membership qualifications makes sense for everyone, including the banks, but especially for credit union members and potential members. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail mwelch@cutimes.com....

"We are talking about something that knows no bounds, and it needs to be cut." -Representative John LaFalce (D-N.Y.) on Internet gambling. LaFalce co-sponsored a bill that would ban the use of credit cards for online gambling. "This legislation takes e-commerce to the next level. Electronic signatures will help grow the digital economy and once the legislation is enacted, credit unions will be better prepared to deal with the risks it presents." -Melissa Zink, vice president of CUNA Mutual Corporate Property & Casualty Division Underwriting/Risk Management. Zink was commenting on the impact of digital signature legislation and how CMG's bond enhancement addresses the new risks it may bring. "As credit unions are the sole source of funding for the agency, it's proper that credit unions take a thorough and comprehensive look at how their money is being used." -Gary Wolter, chair of CUNA's Examination and Supervision Subcommittee, speaking on why CUNA has decided to commission a study looking into NCUA's budget process....

Alliance Funding, a mortgage provider, has appointed Steven Trow regional loan manager. In addition, Alliance Funding has promoted Judy Macy to assistant vice president regional sales manager of the Midwest area. SensCom,Inc., an application service provider of wireless Internet solutions, has appointed Greg Bjorndahl president and chief operating officer. Card Capture Services, Inc., an ATM provider, has named Rich Holt director of business development. D. Hilton Associates, Inc., a credit union industry consultant, has named John Andrews, CCP, SPHR, partner. Countrywide Home Loans, Inc., a residential mortgage lender, has appointed Lisa Okamoto branch manager in Honolulu. Datacard Group, a provider of plastic card personalization and identity management solutions, has named Jeffrey J. Hattara chief financial officer. Fleet Mortgage Services, Darien, Conn., has named Stephanie Kornfeind manager of Credit Union Services. CMG Mortgage Insurance Company, San Francisco, has named Gene Campion senior vice president....

Cabrillo Credit Union, San Diego, President/CEO Robin Lentz has been appointed to the Western Corporate Federal Credit Union Board of Directors. In addition, Cabrillo Credit Union has received a Diamond Award of Merit from CUNA Marketing Council for its four-color newsletter in the $50 to $149 million assets category. Columbia Credit Union, Vancouver, Wash., has named Pam Betteridge branch manager of Salmon Creek. In addition, CCU's investment services branch Columbia Financial Network, has named Phyllis McDonald investment representative. Xerox Federal Credit Union, El Segundo, Calif., has appointed Rebecca Haynes audit and compliance director. USE Credit Union, San Diego, has named Robert S. Newkirk vice president of information systems. Western Corporate Federal Credit Union, San Dimas, Calif., has named Steven Powell senior vice president of strategic services. In addition, Patricia Patterson has been promoted from assistant to the president to vice president. Ent Federal Credit Union, Colorado Springs, Colo., has elected the following members to its board: James Stewart, chairman; Teri Huff, vice chairman; Paul Gefreh secretary; Richard Discenza, treasurer; Stephen David director; Vernon Finch director; Charles Law director; and Terry C. Snow director. Kitsap Community Federal Credit Union, Bremerton, Wash., has named Melinda Anthony vice president of operations and Ron Baker internal auditor. In addition, KCFCU has promoted Dave Willis to vice president of administrative services....

Fort Campbell Federal Credit Union, Ky., has elected the following members to its board: Col. Herbert B. Allen, chairman; Sam A. Salerno, vice chairman and supervisory committee chairman; James H. Thompson, secretary; Fred Newton, treasurer; Charles G. Crist, director; John P. Hunt, director; Boyce R. Meers, director; and A. Thelma O'Brien, director. Michigan Credit Union League, Northville Township, has named Amy Berg education specialist....

Credit Union Mortgage Alliance Network, a credit union owned real estate organization, President Ira Oskowsky has been appointed to Fannie Mae's New Jersey Partnership Office Advisory Board. Western Division Credit Union, Williamsville, N.Y., has named the following members to its board: James Smeader, chairman; Leo Bain, vice chairman; David Supon, secretary; Warren Tulowitzki, treasurer; Robert Kovach, director; and Harry Kaczmarek, director. In addition, WDCU has elected Samuel Loquasto and Ellen Christy to the Supervisory Committee. Fort Belvoir Federal Credit Union, Va., has elected the following officers to its board: Donald Swygert, chairman; Pamela Boyer, 1st vice chair; William Phillips, 2nd vice chair; Melvin Goss, secretary; Leslie Poole, treasurer; and Bruce Edwards, director. Central Credit Union Fund of Auburn, Mass., has elected the following members to its board: RTN Federal Credit Union Treasurer/CEO Richard E. Wright, chairman; Cambridge Portuguese Credit Union CEO Ron Draper, vice chairman; Brockton Postal Credit Union CEO/Manager Brian Hughes, director; and Worcester Credit Union Vice President of Operations Sharon Maloney, director....

Robins Federal Credit Union, Warner Robins, Ga., has awarded five high school students each a four-year, $4,000 scholarship. Named "Most Excellent Senior Team", the five graduating students, who are also credit union members, were selected based on academic performance, community work and extracurricular activities. This year's team consists of the following students: Jennifer Anderson; Carla Bland; Heather Jones; George Parker; and Carolyn Perry. RFCU has over $500 million in assets and serves over 123,000 members. U-Lane-O Credit Union, Eugene, Ore., has awarded three $1,000 scholarships to current Jumpstart Club high school seniors Lindsey Reynolds, Matthew Swinehart and Sara Ventura. Award recipients are chosen from U-Lane-O's Jump Start Club, a financial management club for young adult members. U-Lane-O CU has $360 million in assets and serves 52,438 members. American Eagle Federal Credit Union, East Hartford, Conn., in conjunction with the East Hartford Academy of Finance Program, has awarded a $500 scholarship to East Hartford High School senior Suelee Saynathone. AEFCU has $619 million in assets and serves over 100,000 members. Dupaco Community Credit Union, Dubuque, Iowa, has awarded five $500 Tri-State-Area College Scholarship awards to the following high school seniors: Matt Eggers, Cuba City H.S.; Sara Gerlach, Andrew Community H.S.; Molly McDonald, Dubuque Senior H.S.; Tara Nelson, Wahlert H.S.; and Joshua Tschiggfrie, Hempstead H.S. Teachers Federal Credit Union, Farmingville, N.Y., has awarded scholarships to six Long Island high school seniors. High school seniors William Jorch; Trisha Rossi; Christopher Kline; Bernard Kito; Andrew Smith; and Lauren Markowski were each awarded $1,000 for tuition at the college of their choice. TFCU has $870 million in assets and serves more than100,000 members. Wichita Municipal Federal Credit Union, Kan., has awarded scholarships to Anne Anderton, a Wichita State University student and Melissa Phillips, a Wichita Northwest High School senior. The scholarships are the first awarded through WMFCU's new youth programs. Each student has received $250. Applicants were judged based on grade point averages, extracurricular activities, community service, career goals, letters of recommendation and written essays. WMFCU has $33.3 million in assets and serves 7,019 members....

Xerox Federal Credit Union, El Segundo, Calif., has raised over $4,500 for breast and ovarian cancer research. Over 45 XFCU staff participated in the Revlon Run/Walk for Women event. In addition, XCFCU President/CEO Bill Cheney has been named "Professional of the Year" by the National Association of Federal Credit Unions in recognition of his 17 year service record in the credit union. AEDC Federal Credit Union, Tullahoma, Tenn., has raised $2,968 for the American Heart Association. The collective effort of the credit union's two teams, lead by Bobbie Jones and Melanie Bain, helped AEDC FCU place third out of the 13 businesses that participated. Bain was also named top individual fund-raiser overall. Eastern Financial Federal Credit Union, Miramar, Fla., has raised $10,134 for the March of Dimes. This represents a 20% increase over the previous year's contribution. EFFCU employees and members raised funds by selling stuffed Beanie animal toys, "Blue Jeans for Babies" casual day stickers and participating in WalkAmerica 2000. EFFCU has $1.1 billion in assets and serves over 150,000 members. CUNA Mutual Group, Madison, Wis., a financial services provider, has donated $100,000 to the National Credit Union Foundation, a charitable and fundraising organization for worldwide credit union development. The NCUF will use the donation to further its mission of improving the financial well-being of people. Since NCUF's inception 20 years ago, CUNA Mutual has donated more than $4 million of the $12 million total grant contributions....

Pennsylvania Credit Union League, Harrisburg, has awarded Service 1st Federal Credit Union CEO William J. Lavage the 2000 William W. Pratt Professional Lifetime Achievement Award and Norristown Bell Credit Union Treasurer Floyd Gladfleter the 2000 Joseph A. Moore Volunteer Lifetime Achievement Award. In addition, the PCUL has awarded the Dora Maxwell Award for Social Responsibility to the following credit unions: in the $200 million and over category, American Heritage Federal Credit Union; in the $50-100 million category, Cross Valley FCU in Wilkes-Barre; and tied in the $20-50 million category, CTCE FCU and Service 1st FCU. The PCUL has also awarded Cross Valley Federal Credit Union in Wilkes-Barre the first place Louise Herring Award for Philosophy in Action for CVFCU's commitment to teaching good money management to youths starting from the age of three through the college years. In addition, newly created this year, the Keystone Award, which honors an individual, credit union or organization that demonstrates particular excellence in credit union growth and leadership, has been presented to the founder of the Service Center for Credit Unions Inc., Joni Brown and creator of CU$, a no-surcharge ATM alliance, Pennsylvania State Employees Credit Union. Educational Community Credit Union, Jacksonville, Fla., has been presented the Commissioner of Education award for its role in the Duval County schools. ECCU has $400 million in assets and serves 64,361 members. Ste. Croix Regional FCU, Lewiston, Maine, President Vicki L. Stuart has been presented the James M. Gratto Award for Outstanding Credit Union Manager by the Maine Credit Union League. The award recognizes those individuals who have provided promise to Maine credit unions and their members. SCRFCU has $68.8 million in assets and serves 11,912 members. Riverside County Credit Union, Calif., has been awarded the Community Service Award for 1999 by the United Way of the Inland Valleys. RCCU has been recognized not only for its financial contributions and participation in the United Way's efforts, but for its diverse contributions and support of the community as a whole. RCCU has $275.4 million in assets and serves 64,274 members. Towers Federal Credit Union, Annapolis Junction, Md., has been recognized by Washington Consumer Checkbook magazine as scoring among the highest in service in the Baltimore-Washington area. Tower's overall service was ranked "superior" by 90% of the respondents and received a "superior" rating from at least 78% or greater in every category evaluated by the study. The categories included knowledge of staff, speed of service, pleasantness of staff, convenience of hours, reasonableness of fee policies, clarity of written communications and overall service. TFCU has $840 million in assets and serves 100,000 members....