SILVER SPRING, Md. — Opportunity knocks for credit unions to better serve the Latino community.

A National Foundation for Credit Counseling/MSN Money 2008 Financial Literacy Survey finds that often the basic building blocks to financial security is lacking.

According to the survey some 79% or roughly 18.8 million Latino adults, report that they have never received professional advice about financial issues and that 28% admit to struggling to pay their bills each month. In addition, for most households, housing costs comprise the single largest monthly expense with roughly 1.7 million Latinos reporting that they either paid their mortgage late or totally missed a payment in the last 12 months.

The survey also reveals that roughly five million Latinos admit to having no idea what they spend their money on and 37% have nothing saved for retirement.

When it comes to credit cards, the following was observed in the Latino community: 40% state that they have no credit card. In spite of being able to obtain a credit report free of charge, only 32% have done so and 32% reported a credit score under 700, which subjects roughly 7.5 million adults to paying a higher interest rate and potentially restricts their borrowing power.

Member Gets100,000 Penny Windfall to Mark Indiana Members CU Milestone

INDIANAPOLIS — Indiana Members Credit Union surprised one of its members with 100,000 pennies or the equivalent of $1,000 to celebrate reaching a membership growth milestone.

Holly Brune, a 20-year-old, working student, was the lucky recipient. On the advice of her mother, who works for the Indiana University-Purdue University Indianapolis system, Brune joined the credit union.

“When I joined, Indiana Members' employees were wonderful to me. They really helped me and explained everything I needed to know,” Brune said. “And, wow, to win $1,000, that was really cool. I can certainly use it for school. I certainly want to thank Indiana Members Credit Union and my mom for recommending that I join.”

Brune, who was presented with a check for $1,000, said she's also thankful that the credit union “didn't make me take the money in pennies.”

Founded in 1956 on the IUPUI campus, Indiana Members CU has grown to become one of the largest credit unions in the state with more than $1 billion in assets. It just recently opened its 25th branch.

“With financial institutions besieged by mergers, sky rocketing fees, mortgage issues, and complicated products and services, Indiana Members has experienced consistent growth and stability,” the credit union said. “Fiscal responsibility and overall conservatism have enabled the success.”

Big Illinois Sign-Up Heralded for
REAL Solutions Loan Program

NAPERVILLE, Ill. — Illinois credit unions are getting off to a quick start this month in supporting the REAL Solutions program run by the National Credit Union Foundation designed to aid low-wealth households and others with payday alternative and financial education products.

“Illinois credit unions set a record for having 30 sign up at the first meeting, which is the most of any so far,” said Steve Bosack, deputy director of NCUF in describing an introductory session conducted by the Illinois Credit Union League.

Both the league and NCUF said the enthusiastic backing for REAL Solutions shows continuing support among state leagues for the program which commits CUS to offer a wide-ranging menu of products and services.

League officials, projecting more CUs would signup during 2008, said the newfound partner CUs convened at the session discussed procedures in offering the products this fall throughout the state.

Before Illinois and its 30 sign ups, the previous record launch was Arizona with 19, said Bosack.

At the national level, REAL Solutions, he said, is now being offered by nearly 500 CUs in 28 states.

“The original goal was to reach 33 states by the end of 2009,” he said. “Now less than halfway into our three-year signature program commitment, REAL Solutions has already reached critical mass.”

Dan Plauda, president/CEO of the league, said the trade group is excited to see the good turnout considering “we believe the partner credit unions will gain tremendous benefits from their involvement, and we look forward to seeing the program expand in the future.”

HR Stepping In to Help at the Pump

ALEXANDRIA, Va. — As gas prices continue to soar, human resource departments have been busy developing creative ways to help employees beat the high cost of commuting. According to a recent Society for Human Resource Management survey entitled “What Employers are Doing to Help Their Employees with High Gas Prices in 2008,” most organizations are turning to benefits not increased pay to help employees cope.

The most common employer move has been to raise the mileage reimbursement to the IRS maximum. In addition, some 26% are offering a flexible work schedule, 18% telecommuting, 14% public transportation discounts and 14% are rewarding employee performance with a gas card.

Some employers are even helping staffers organize carpools or offering priority parking to employees who carpool. In addition they are offering new non-executive hires help in finding housing closer to the office and offering monetary incentive for employees to buy hybrid cars.

Financial Service Centers Cooperative
Extends Ties With Digital Dialogue

SAN DIMAS, Calif. — Financial Service Centers Cooperative Inc. has extended by 10 years its call center and software services relationship with Digital Dialogue, the companies said.

FSCC provides 5,000 access points for shared branching and call center services to more than 12 million credit union members and 1.8 million of its transactions were processed last year by Digital Dialogue, the companies said.

Digital Dialogue, owned by PSCU Financial Services and based in suburban Detroit, has partnered with FSCC since 2003 and serves more than 200 individual credit unions along with the FSCC network.

“Digital Dialogue offers our various credit union affiliates total member service with 24/7/365 call center operations,” said Sarah Canepa Bang, CEO at FSCC (www.fscc.com).

“Because our credit union network is geographically disbursed throughout the world, the technology that Digital Dialogue offers is invaluable to our credit unions and their members,” she said.

The announcement was made at FSCC's annual meeting in Chicago.

“Working with FSCC over the past five years, Digital Dialogue has grown both its market share and products and service offering with custom-branded call center services,” said Peter Schmitt, president of Digital Dialogue (www.digital-dialogue.com).

Mortgage Report's Default Risk Index
Continues Its Upward Trend in Quarter

The UFA default risk index stands at 143 in the second quarter, which means the risk of default on newly originated nonprime mortgages is 43% higher than the average of the 1990's.

The index is up from a revised 138 in the first quarter of the year. The index is continuing the steeply rising trend for expected loan losses for recently originated mortgages. Expected life-of-loan losses on mortgages originated today are now higher than for mortgages originated at any time since 1992.

The index remains below the previous peak of 160 that registered in 1990.

This quarter's changes reflect the life-of-loan impact of mortgage rates as well as the weakening of the collateral markets. The index and analysis was published in UFA Mortgage Report by University Financial Associates of Ann Arbor, Mich.

“The index highlights only the increase in expected defaults arising from the local economic environment,” said Dennis Capozza, professor of finance with the Ross School of Business at the University of Michigan and a founding principal of UFA.

“Unfortunately, underwriting standards also eroded in recent years, so the index understates the actual increase in defaults that will be realized. The loss performance of loans originated last year suggests that underwriting had not yet tightened on nonprime loans. However, many fewer nonprime mortgages are being originated.”

The UFA Mortgage Report is an analysis that has successfully predicted such developments as the increased defaults in Southern California in the mid-90s and the current increases in defaults. Its predictions are based on an extensive analysis of local economic conditions in each state and the relationship of those conditions to loan profitability. The historical record of millions of mortgage loans is studied each quarter to assess the vulnerability of each state to loan losses and prepayments.