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ANAHEIM, Calif. – Leaders from California’s largest system providers presented their perspectives on the changing landscape of the financial climate, and their strategies to address those changes during a panel discussion at the California and Nevada Credit Union Leagues’ convention and annual meeting. WesCorp CEO Bob Siravo drew laughs from the audience when he began his discussion regarding the future of interest rates, pausing to put on a blue wizard’s hat like the one Mickey Mouse wore in the Fantasia cartoon. The league meeting was being held at the Disneyland Hotel. “First, I’ll need this if I’m going to predict interest rates,” Siravo joked. Once the laughter died, Siravo got down to business, presenting a graph that showed the decrease in margin between dividends paid to members and interest earned from loans. “Historically, there’s always been a huge gap, but this is the margin squeeze everyone is talking about,” Siravo said. The WesCorp wizard said the slim margin will probably remain for another year, but within 18 months, credit unions can start to see margins increase and return to previous levels. Siravo also commented on WesCorp’s recent announcement of the merger between his $25-billion corporate and $1-billion VolCorp in Tennessee. “It’s an interesting merger and unique because it’s the first time corporates have done inter-market activities and partnerships. We’re looking forward to that,” Siravo said. With increased discussion of liquidity in credit union ranks, Siravo urged credit unions to share the wealth if they have a high loan to share ratio. “If you are 100 percent loaned out, share loans with those who need them. There are more people out there who need loans than have loans,” Siravo said. He also assuaged fears for credit unions considering borrowing short term to fund loans, saying, “It’s a smart strategy. Don’t be afraid, because rates are pretty steady short term, and risk is at a minimum.” CO-OP Network CEO Stan Hollen announced his organization’s renewed agreement with 7-11 convenience stores, and said the network hopes to go live in the stores by Nov. 1. The 7-11 deal will add 5,000 new ATM locations to the network, including 1,500 deposit taking ATMs. (See related story on page 37.) Speaking about the CO-OP’s recent success imaging an ATM deposit, Hollen said he expects this new technological advance to reduce ATM deposit expenses, because deposits won’t need to be removed as often. Regarding interchange, Hollen said credit unions will continue to see a reduction in income because of restructuring within system corporations like Visa and MasterCard. “MasterCard is doing an IPO to, among other things, reduce the risk to owners as a result of lawsuits, and it’s potentially possible Visa will see the same structure in the future,” Hollen said. Hollen also announced the CO-OP will focus on fighting card fraud next year, in light of the numerous incidents of data theft that have occurred during the past year. “We’re having meeting with CUNA Mutual to assist them and provide help for credit unions with ways to combat against fraud,” Hollen said. Jeff Kloss, Vice President and Senior Marketing Officer for CUNA Mutual also spoke about card fraud, saying the insurer is taking a different approach to address the problem. “As an insurance company, we could just pay losses and raise premiums, but we’re taking a new approach. We’re suing companies that don’t take precautions they should,” Kloss said. Other panelists included Sarah Canepa Bang, CEO of FSCC and Tony Boutelle, CEO of CU Direct. -

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