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INSIDE- South Carolina Credit Union League

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INSIDE- South Carolina Credit Union League Powered By Docstoc
					 A PUBLICATION OF THE SC CREDIT UNION LEAGUE & AFFILIATES




NOVEMBER


INSIDE:
        2006




             2
  CUs fulfill
      their




             5
   mission

Embracing
a changing




             7
                            Leading the way
  CU world




                            A
   Micro-
Community                         Linda Weatherford, SPC Cooperative Credit Union’s director of marketing and business devel-




            12
   Grants                   opment, takes time to discuss a financial concept with a Mayo High School student. The Hartsville-
                            based credit union involves its entire organization and a variety of methods to impress upon youth
                            the importance of financial knowledge.

Innovation
    key to
   lending
                                          lphonse Desjardins founded the first credit unions in Canada and the
                                          U.S., and he pioneered youth savings clubs and in-school "banks,"
                                          known as caisses scolaires. In his honor, the Credit Union National
                                          Association created the Desjardins Youth Financial Award for credit
                           unions and leagues.
                               This month, we congratulate state-level Desjardins Award winners SPC
                           Cooperative Credit Union and State Credit Union, and we highlight the outstanding
Safe Deposit               work of each to promote improved financial literacy throughout the Palmetto State.
Workshop
                           SPC Cooperative Credit Union
December 12, 2006          $80-200M in assets
Edward L. Bateman Center   Involved, Committed, Enlightening
Columbia, SC
                              SPC Cooperative Credit Union delivered on its plans to reach and teach youth
                           and young adults throughout its market area in 2005-2006. From face-to-face instruc-
                                                                                                    See ‘06 Desjardins, Page 6
                          NCUA: CUs fulfill their mission
                          League Message

                          Steve Fowler
                          Executive Vice President, Advocacy
                          South Carolina Credit Union League

                               The        to all credit unions extending service   national and regional publications
                            National      to underserved areas, credit unions      highlighting how credit unions serve
                            Credit        could be doing even more to serve        underserved members
                            Union         lower-income Americans.
Administration (NCUA) has issued a             The banking industry has insti-          The League also will help South
report on the results of its ‘data col-   gated much of the “who credit unions     Carolina’s credit unions attest their
lection pilot’ program on service to      serve” talk. Yet, their lawsuits and     value to members and communities.
members, including those of modest        antagonistic work stand in stark con-    Early next month, we will send a
means.                                    trast to their own complaints that       Credit Union Values assessment tool
     Results show that credit unions      credit unions are not doing enough –     designed to collect and record infor-
are serving the members Congress          complaints that are undermined fur-      mation on credit union services and
has always intended for credit            ther by NCUA’s report.                   related activity. Then in 2007, we will
unions--middle class, working                                                      provide an online method for credit
Americans who live largely paycheck                                                unions to submit news items and
to paycheck.                                 The League will help                  other service summaries, enabling the
                                                                                   League to assemble and present these
     The report also shows the
hypocrisy of bankers’ criticism of             South Carolina’s                    in our publications, post them on our
credit unions for not doing enough
for those of modest means even as
                                                credit unions                      website, and leverage them in other
                                                                                   advocacy efforts.
bankers erect barriers to credit union        attest their value                        The League and CUNA have pre-

                                                 to members
service to those people.                                                           pared these resources for strategic
     Report details indicate that:                                                 use at your discretion, whether as a
                                              and communities.                     basis for press releases, in an infor-
    60 percent of credit union mem-                                                mational piece to leave with elected
bers have family income below                                                      and public officials, or in any other
$60,000 and 82 percent of credit union         To help you place the NCUA          method you prefer.
members have family income below          report into context, the League and           British Prime Minister Benjamin
$75,000.                                  CUNA have prepared online links to       Disraeli once gave this advice to a
                                          a number of tools. These are avail-      new Member of Parliament: “For the
    Over the last 100-plus years,
                                          able for use by your management,         first six months you should only lis-
credit unions have served working
                                          staff, volunteers, members, and even     ten and not become involved in the
Americans just as Congress has
                                          the public should the need arise.        debate.”
always intended.
                                          Among the tools are:                          “But my colleagues will wonder
    Credit unions, if given the                                                    why I do not speak!” the fledgling
authority, can and do increase their           Message points on credit union      member protested.
service to underserved members.           service to modest means members,              “Better they should wonder why
                                          and on executive compensation at         you do not, that why you do!”
    Community-chartered credit
                                          credit unions (both issues were the      replied Disraeli.
unions tend to serve more of the
                                          subject of the data collection)               The NCUA followed that princi-
underserved over time--20 percent of
                                               Fact sheets on who credit unions    ple in their work, listening and
federal credit unions now have com-
                                          serve; who Congress says credit          researching the question before pre-
munity charters, but only 9 percent of
                                          unions should serve; products and        senting its response to Congress. The
the credit unions that have converted
                                          services offered to modest means         results show credit unions should
to community charters have had
                                          members by credit unions, what oth-      stay the course--continuing to fulfill
those charters for more than five
                                          ers are saying about credit union ser-   the mission Congress and their mem-
years.
                                          vice, and credit union lending to low-   bers have set--serving working
   These findings show that if            and moderate-income members              Americans and improving the quality
Congress would remove the barriers             Recent news articles from           of life for all.




                                                            2
SC Federal’s holiday shoe
drive ties-in with brand                                                     CALENDAR
                                                                               Upcoming Events
     Charleston, SC - South Carolina Federal Credit


                                                                            December
Union, the largest credit union in the state, is running a
major initiative to provide thousands of shoes to under-
privileged people this holiday season.

                                                                                    3-6
     Devised to address an often-overlooked need among
South Carolina’s young citizens, the shoe drive comple-                                      NASCUS BSA CONFERENCE
ments South Carolina Federal’s new branding theme,                                           SAN DIEGO, CA
“Life Simplified.” Recognizing that the credit union’s
members come from all walks of life, a new campaign
uses the metaphor of “shoes” to convey how SC Federal                                   4    CAROLINAS CREDIT UNION
                                                                                                LENDING COUNCIL
has supported its members at every step of their lives.                                      FAMILY TRUST FCU TRAINING CENTER
     With the shoe drive, SC Federal is meeting the needs                                    ROCK HILL, SC
of some who might otherwise be unable to help them-                                          WWW.SCCUL.ORG/EDUCATION_REG/
selves. Many of young South Carolinians are severely                                            DEC06LENDINGCOUNCIL.PHP
impacted by low income levels, and the state has a higher

                                                                                      12
percentage of residents below the poverty line than the                                      SAFE DEPOSIT WORKSHOP
national average.                                                                            EDWARD L. BATEMAN CENTER
     From November 1 through December 15, South                                              COLUMBIA, SC
Carolina Federal will accept donations of “gently used”                                      WWW.SCCUL.ORG/EDUCATION_REG/
shoes at its branches so they can be cleaned and distrib-                                       06SAFEDEPOSITWS.PHP
uted to needy South Carolina residents.

                                                                             January
     For every two pairs of shoes collected during the
campaign, South Carolina Federal will purchase one new
pair of shoes for disadvantaged children in the area, up
to 5,000 pairs.
                                                                                   30-       CUNA COMPLIANCE

                                                                                FEB.13
     “(S)imple things make a huge difference in a person’s                                   FUNDAMENTALS ESCHOOL
life,” said Scott Woods, the North Charleston-based cred-                                    TRAINING.CUNA.ORG/CALENDAR.PHP
it union’s president and CEO. “By hosting this shoe
drive, we put our theme of ‘One Step Ahead’ into action,
                                                                                       cudd@sccul.org 800-235-4290
and serve a real community need by helping thousands
of disadvantaged citizens.”
     All 23 South Carolina Federal branches and its head-
quarters are participating. Each branch will serve as a                     next year...
drop-off site with specially marked collection bins to
gather donated shoes.                                                       Credit unions interested in the South Carolina Credit
      South Carolina Federal has partnered with                             Union League’s political activities should save the
Charleston and Columbia-area branches of the Salvation                      dates for two “Hike the Hill” trips in 2007. The League
Army to implement this program.                                             will lead its first contingent to Washington, DC on
     “We’re grateful for the opportunity to help the needy                  May 15-17. The second trip of the year is planned for
citizens of South Carolina through this effort,” said                       September 18-20.
Captain Linda Thornhill of The Salvation Army in                            For each trip, Tuesdays and Thursdays are travel
Charleston. “Community outreach programs such as                            days. Wednesdays typically include a briefing at
South Carolina Federal’s will make all the difference this                  Credit Union National Association (CUNA) head-
holiday season to people in need.”                                          quarters, visits to Congressional offices on Capitol
     Look for more on the credit union’s new campaign                       Hill, a reception at Credit Union House, and a group
and enhanced brand identity in the December League                          dinner.
Review.
                                                                            If you have questions about “Hike the Hill” events,
     More than 140,000 members own and belong to South Carolina             contact SCCUL Director of Governmental Affairs Jim
Federal, which has more than $1 billion in assets. It is a community-       Nunamaker (jnunamaker@sccul.org) at 800-235-
chartered credit union serving anyone who lives, works, worships or         4290, extension 444 (803-732-8444).
attends school in Dorchester, Berkeley, Charleston, Orangeburg,
Clarendon, Calhoun or Georgetown counties, and most of the Columbia
area



                                                                        3
Clips...
           Family Trust hosts “Real Life... Real Money”
              Family Trust FCU hosted “Real Life…Real Money”, a free finan-
           cial education event for teens and young adults, on Saturday,
           October 28.
              More than forty teens and young adults attended the workshop
           covering online banking, security and identity theft prevention,
           loans, credit, budgeting, check writing, ATM tips, credit versus
           debit, and investing.
              Participants were able to open checking and savings accounts
           and received coaching on how to properly manage their new
           account. Attendees also enjoyed music and food and registered for
           a chance to win cash prizes.


           Clemson Road service center grand opening
               Palmetto Citizens Federal Credit Union celebrated the grand
           opening of its newest service center on Thursday, October 26. The
           service center is located at 2651 Clemson Road in Northeast
           Columbia, 1.5 miles off of the I-77 Killian Road exit next to Killian
           Elementary.
               It is a full-service operation with six drive-up teller lanes, six
           teller stations, lock boxes, and a drive- up ATM.
               Palmetto Citizens now has ten service centers in addition to the
           call center to serve their members.


           Palmetto Citizens walks for breast cancer
              At the First Ladies’ Walk for Life... Steps Against Breast Cancer
           Walk on Saturday, October 7, Palmetto Citizens FCU was recog-
           nized for the fourth consecutive year as the second largest team
           with 240 members and contributions totaling over $4,800.
              To raise money, PCFCU sold pink ribbons, enamel ribbons and
           car magnets throughout October in their service centers. The credit
           union also hosted 30-minute informational sessions for staff mem-
           bers about the importance of early detection in the fight against
           breast cancer.


           SCU named one of SC’s best places to work
              The recent Best Places to Work in South Carolina survey con-
           ducted by the Society for Human Resource Management (SHRM) -
           South Carolina State Council, ranked State Credit Union fifth
           among employers throughout the state. The credit union was
           among only 15 companies honored in the program. The selection
           process was based on an evaluation of employee policies and pro-
           cedures and results of a 65-question employee survey.
               “This award...will enable SCU to develop and implement the
           strategic steps necessary to continue to improve our workplace and
           service to our members,” said Merida Rabon, HR director at SCU.




                 4
                          Embracing Change
                          Lee C. Gardner, Jr.
                          Chairman of the Board of Directors
                          South Carolina Credit Union League & Affiliates
                                  I began my credit union             for print and mail. We simply cannot depend on these busi-
                           career in 1978 as the assistant man-       ness lines to fund other League services as we have in the
                           ager of what was then the                  past.
                           Corporate Central Credit Union, an              Since its inception, the League has provided certain ser-
                           affiliate of the South Carolina            vices at no cost over and above the membership dues. These
                           Credit Union League. There were            were generally considered “dues-supported” services. The
just over 200 credit unions in the state at that time, and the        truth today is the dues total from a shrinking number of
largest one was not quite $50 million in assets.                      credit unions is barely enough to pay the cost of advocacy.
     The League and its affiliate organizations were the hub               Traditional cash-cows are much closer to break-even,
of support on which all credit unions depended. League ser-           meaning the gross income is adequate only to cover the
vices included education, corporate financial services, data          costs. Once all these pieces are in place, the completed puz-
processing, field support and political advocacy. At that             zle reveals the real picture: These member services, many
time, the Annual Meeting and one fall conference were                 that have been considered dues-supported in the past, are
about the extent of educational events, and advocacy was a            actually being provided at a financial loss to the League.
part-time job.                                                             The SCCUL Board of Directors recognizes that we are at
     Needless to say, a great deal has changed. Today we              a transitional point in the history of the League, and we are
have two South Carolina credit unions that have exceeded              facing many new challenges. Over the coming year, we will
$1 billion in assets and several that are near the $500,000,000       identify the market value of many of the professional ser-
mark. Credit unions with less than $50 million are now con-           vices provided by the League. Among them are strategic
sidered the small credit unions, and the total number of              planning and management surveys that require much time
credit unions has been reduced to only 86. There is a much            and resources. It is not our intent to generate new profits
greater need for education, advocacy, and operations sup-             from these services, but to adequately cover the costs. At the
port, all of which are more sophisticated and obviously               same time, the League board remains firmly committed to
more costly.                                                          supporting any credit union that needs assistance and may
     These changes have brought about new challenges with             not be capable of paying.
regard to the revenue necessary to cover expenses associat-                As we make this transition, the League is fortunate to
ed with delivering member services.                                   have a reasonable amount of retained capital. This will bene-
     Throughout the 1980’s and 1990’s, we depended heavily            fit us as we make the necessary changes to provide the sup-
on the income from share draft processing and print and               port credit unions need. It also allows us to provide credit
mail. Industry-wide changes have now rendered these busi-             unions some assurance of a slow transition to fee-based ser-
ness lines less robust than they have been in the past.               vices.
     The explosive advent of debit, ACH and electronic bill                I encourage credit unions to always seek the assistance
pay is quickly and materially reducing the number of paper            and services provided by our League. Your feedback is valu-
checks for collection. Electronic banking, e-statements, and          able as we chart a strategic future for the League and its
other forms of electronic delivery are reducing the demand            member credit unions.


CU Health Care Assn. of SC offers health insurance savings
    As the time for health insurance renewals rolls around, this is a great time to consider the Credit Union Health Care
Association Plan. Offered by Blue Cross/Blue Shield of SC for members of the South Carolina Credit Union League, the
Association Plan was conceived in an effort to obtain lower insurance rates by “pooling” the employees of numerous credit
unions. The Association Plan is an excellent resource for obtaining more favorable rates.
    The Association Plan offers four separate plans, from a very low deductible to a large deductible. As part of the applica-
tion process, each credit union is rated on a tiered system based upon demographic information and answers to a group
health questionnaire.
    During its first year, the Credit Union Health Care Association of SC (CUHCASC) has grown to total of eight groups
with just over 100 insured individuals. To continue to obtain maximum benefit of pooled resources, more participants need
to be added so that the plan will grow at a steady rate over the next few years. As your credit union receives quotes for first
of year renewals, take the opportunity to obtain a quote from the Association Plan.
    To obtain a quote or for more information about how your credit union can join the Association, please contact Andrew
Rothschild (404-875-5812) if your group has more than twenty employees or Pollyanna Sailor (800-356-2644 ext.7479) if your
group has less than twenty employees.


                                                                  5
‘06 Desjardins, from Page 1
tional time to “fun” days, SPC activities
demonstrated the significant value the               State Credit
credit union sees in youth and young              Union’s Suzette
adults. Staff assisted with scholarship          Morganelli leads
presentations, acted as “Principals for             a live-to-tape
the Day,” and promoted SPC’s newest              workshop on the
services for younger members.                  NEFE High School
      Specifically, SPC’s Youth Week cel-      Financial Planning
                                                         Program.
ebration from April 24-28, 2006 was a
primary vehicle for informing teachers,
officials, elected officials, the press, and
public about the problem of financial              Benefits of membership in either      ed in the Instructional Television and
illiteracy. By first sending a letter to       club include SPC’s annual “Got Any        Staff Development Resources booklet
each high school within the tri-county         A’s” reward program. Students are         distributed through the South Carolina
area, SPC secured invitations to pro-          rewarded $2.00 for each “A” on their      Department of Education. The video
vide financial education that week to          report card up to a maximum of $10.00.    runs monthly during each school year.
more than 200 students at Hartsville           Rewards are deposited into student             To further engage and guide teach-
High School and Mayo High School.              accounts upon receipt of each one’s       ers, SCU proposed to SCETV a six-unit
      Throughout the week, children 0-         year-end report card, reinforcing SPC’s   “Train the Trainer” course. The credit
17 were encouraged to make deposits.           message that saving and education pay     union then helped transition the work-
For every $20 deposited, a child               dividends.                                shop to an ongoing, comprehensive
received an entry into a drawing for a                                                   “NEFE Financial Literacy Course” by
$100 Toys-R-Us gift certificate. The           State Credit Union                        adding a viewer’s log, written assign-
result was more than $34,000 in                $200M+ in assets                          ments, and final evaluation. Today,
deposits to youth accounts. Week-long          Teacher-Focused Crusade                   educators completing the course earn
festivities featured daily themes and a                                                  twenty renewal recertification credits
Friday party and live radio broadcast.              When the South Carolina Financial    toward the SC professional educator’s
      SPC also participated in the             Literacy Act was signed in April 2005,    certificate. Following an introductory
Greater Darlington Chamber of                  State Credit Union recognized educa-      facilitation, educators can view the six
Commerce “Reality Check,” helping              tors’ need for an easy-to-implement       video units through special ITV broad-
more than 200 Darlington High School           financial education program. It           casts to all schools.
ninth-graders experience “real life”           responded with a strategy to raise             Another incentive is the credit
events such as career choices, purchas-        awareness of the mandate, promote the     union’s annual scholarship and award
ing a home and auto, paying monthly            free National Endowment for Financial     program for exemplary participation in
utilities, and more.                           Education’s High School Financial         the NEFE program. SCU awards $1,000
      The credit union continually pro-        Planning Program (NEFE HSFPP),            to an outstanding student, and $500
motes the NEFE High School Financial           make “Train-the-Trainer” programs         each to an outstanding teacher and an
Planning Program through classroom             accessible to educators statewide, and    outstanding middle or high school.
instruction and while networking with          provide incentives.                            SCU employed various promotion-
chamber and civic organizations. SPC                SCU Director of Financial            al methods, including: attendance,
provided material and resources to             Counseling and Education Suzette          video presentations, and speaking
several schools, private and public,           Morganelli spearheaded efforts. With      engagements at education-based con-
during the year.                               SCETV, she produced an “Introduction      ferences; enhancements to the credit
      Also, the credit union provides          to NEFE” video imparting to educators     union, SCETV, and educational organi-
educational materials quarterly to             the need, importance, benefits, and       zation websites; publications for the
younger members, highlighting the              legal mandate for financial education     educator community; and radio inter-
value of saving and credit union mem-          in South Carolina. The video detailed     views for SC Business Review and
bership. Members ages 6-12 are part of         the law’s requirements while inform-      Speaking of Schools programs on
the Savasaurus Club, in which they             ing teachers of the free NEFE High        National Public Radio (NPR).
receive a “Brontobits” newsletter and          School Financial Planning Program.             SCU’s impact is evident in the
have access to a custom web page                    In August 2005, the video was        number of NEFE instruction manuals
within the credit union’s website. Teen        broadcast through ETV’s Instructional     ordered by South Carolina educators.
members ages 13-17 are known collec-           Television network to all middle and      The total grew from 17,570 in 2004 to
tively as Teen Scene, and they have            high school classrooms statewide and      24,650 in 2005—a 40% increase that
access to their own customized web             was made accessible through ETV and       puts South Carolina seventh nationally
page on SPC’s site.                            SCU websites. Information was includ-     in total materials ordered since 2001.


                                                                     6
Foundation awards three more grants to SC organizations
     The Carolinas Credit Union           Girls Club of Sumter has served dis-         offers community education. It is the
Foundation (CCUF) recently approved       advantaged youth ages 6-18 for more          only provider of these services in the
three new proposals for Micro-            than forty years. It has relocated to a      area, which has more than 185,000 resi-
Community Grant funding for organi-       new site with more room for new par-         dents.
zations in South Carolina.                ticipants it hopes to attract. The organi-        CODA’s specific need is a net-
     The Foundation board met and         zation serves 29 schools, with atten-        worked data management system and
approved the applications at its          dance of 150 youth five days per week.       improved materials for the public. The
October 25 meeting.                       More than 25% of club members live in        organization’s current record-keeping
     The Child Abuse Prevention           poverty, and more than 65% are in sin-       system is obsolete, past client’s files are
Association (CAPA) of Beaufort            gle-parent homes.                            stored off-site, and informational mate-
County was founded in 1980 to pro-             According to Benjamin Bailey,           rials are inconsistent.
vide prevention and intervention pro-     executive director of the Salvation               With its $12,500 grant, CODA will
grams designed to break the cycle of      Army Boys and Girls Club of Sumter,          implement a system that provides
child abuse and help victims. CAPA        the organization plans to use the            immediate access to vital information.
programs help residents of five coun-     $20,000 Micro-Community Grant for            It will also update stationery,
ties in South Carolina and require sig-   tables, chairs, and equipment in its         brochures, and other printed material
nificant volunteer support.               computer learning center and recre-          to make CODA more recognizable to
     With its $20,000 grant, CAPA will    ation area.                                  those it exists to serve.
continue school-based safety and char-         Citizens Opposed to Domestic                 CCUF Micro-Community Grants
acter development programs for chil-      Abuse (CODA) provides victims of             are donations to community organiza-
dren, teen pregnancy prevention pro-      domestic abuse safe and secure shelter,      tions and charities that support causes
grams, and related work. The pro-         individual and group counseling, legal       consistent credit unions’ “people help-
grams are currently at a net loss of      representation and court advocacy,           ing people” philosophy. Grant requests
$30,000, which CAPA is working to         case management, services for chil-          come from credit unions throughout
recoup in 2007 through an endowment       dren, and outreach. It serves citizens of    North and South Carolina. Visit
and other fundraising.                    Beaufort, Colleton, Hampton and              www.carolinasfoundation.org for
     The Salvation Army Boys and          Jasper Counties, where CODA also             details.



CUNA Council seeks marketing,
business development ‘best practices’
     MADISON, Wis. - Nominees are now being sought for                rebranding, sales culture implementation, disaster plan
the 2007 Best Practices Awards sponsored by the CUNA                  activation, or leveraging of the marketing central
Marketing & Business Development Council.                             information files for improved marketing results.
     The awards recognize outstanding new marketing and
business development approaches with potential for univer-            A panel of judges will select award winners, without
sal application across the credit union movement. Award           regard to asset size, based on strategy, process, application,
categories are:                                                   and results.
                                                                      Entry materials for these awards must be received by
    Business Development - Beyond normal activities, this         Monday, January 8, 2007. Details and entry forms are avail-
    category details how the credit union further developed       able online at www.cunamarketingcouncil.org under the
    the relationship between itself and sponsor company(s),       "Events" pull-down menu.
    their employees, or the community it serves.                      Award recipients must be present at the 14th annual
                                                                  CUNA Marketing & Business Development Council
    Community Outreach and/or Political Advocacy -                Conference March 14-17 in Las Vegas to deliver a short
    Submissions should describe the credit union's                PowerPoint presentation on their winning entries. Winners
    community relations strategy or politically-themed            also will receive a $300 honorarium.
    event or program advocating a political candidate                 For more information on entry procedures, contact
    or the credit union movement.                                 Bobbi Bischke, CUNA Council Administration, at 800-356-
                                                                  9655, extension 4018, or by e-mail at bbischke@cuna.coop.
    Best Practice Miscellaneous - open to any successful          General questions pertaining to the Best Practices Awards
    event, program, or initiative led by the marketing            should be directed to Carol Payne, director of communica-
    and/or business development department. Examples              tions and marketing for the California Credit Union League,
    include, but are not limited to: name change or               at 909-581-3237, or by e-mail at cpayne@ccul.org.


                                                              7
                  News from
Shaping your ALCO Committee                                                        MemberPay
                                                                                   one of two
                                                                                   EBP solutions
What is the role of an Asset Liability Committee (ALCO)?

    The purpose of the ALCO is to give direction to management. Using
interest rate risk reports, the committee should review the current situation           When was the last time you
and steer the path of the credit union. ALCO guidance will enable manage-          reviewed the listing of your credit
ment to make informed decisions for the betterment of the organization.            union’s products and services?
Reports should be analyzed for the current ALM situation and the proposed               Did that review turn up an elec-
strategies the committee wants to implement. The process goal is risk              tronic bill payment solution (EBP)?
assessment and program modification toward the desired level of risk.              And if so, is it one the staff and mem-
                                                                                   bership use and are happy with?
How do ALCO committee members know the desired level of risk?                           If you answered “No” to either
                                                                                   question, keep reading.
     The ALCO committee should be involved in setting the interest rate risk            In our endeavor to provide a vari-
limitations for the credit union. Before the group is able to set those limita-    ety of products to our member credit
tions, it should be appropriately trained in interest rate risk management.        unions, First Carolina offers two EBP
     Once training is complete and the committee is ready to proceed , the         solutions, MemberPay and MY CU
NCUA gives general guidance in Chapter 13 of the Examiners Guide.                  Service. This month, we will highlight
Knowledge from training and NCUA guidance should aide in setting the               MemberPay.
risk limitations.                                                                       MemberPay offers credit unions a
     Regardless of outside opinions, interest rate risk parameters are depen-      full-scale, service-bureau bill payment
dent on the risk tolerance level of the ALCO and are subject to the unique         solution. It includes intuitive naviga-
characteristics of the credit union. These limitations should be used by the       tion on the front end and an efficient
committee to ensure the established parameters are maintained to control           payment processing service on the
interest rate risk.                                                                back end, enabling credit union mem-
     In addition to interest rate risk, the ALCO’s other responsibilities should   bers to pay virtually anyone online.
include setting the strategic guidelines for the investment portfolio and liq-          With MemberPay, credit unions
uidity management--two key elements of interest rate risk management to            can add a link from their Web site to
incorporate with ALCO meetings. Understanding interest rate risk concepts          connect members to enroll online and
and implementing controls for these risks are vital to every credit union.         begin paying bills. Multiple payment
                                                                                   options, a personal payee database,
What should be covered during an ALCO meeting?                                     transaction history, status updates, a
                                                                                   secure message center, and an admin-
   Once committee goals, training and limits are established, an ALCO              istration system are included with
meeting might typically follow this example of a basic agenda:                     MemberPay.
                                                                                        For more information on
    •   Review, discuss and approve previous minutes from                          MemberPay or to schedule a product
           the ALCO meeting                                                        demonstration, contact Wanda Downs
    •   Open discussion about the economic outlook                                 (wdowns@firstcarolina.org) at 800-585-
    •   Analyze current risk and performance                                       4317, extension 3276, or Jill Bennett
    •   Review and revise current plans and projections                            (jbennett@firstcarolina.org) at exten-
    •   Other issues and discussion topics                                         sion 3253.

    Although the ALCO committee has a significant responsibility, it is an
essential aspect of the credit union’s management. There are many areas to
                                                                                   Test your credit union knowledge!
learn, but any ALCO can be effective with the proper training. Start today to           Be the first to correctly answer
build an ALCO that will help your credit union grow.                               FCCCU’s online quiz each Monday and you’ll
    For assistance with your ALCO or for more about First Carolina’s               receive a First Carolina leather jotter and
Internet-based ALM model, contact ALM Analysts Jennifer Lachance (ext.             pen.
3220) or Melissa Scott at 800-585-4317 (ext. 3255).                                     Submit your own quiz question to Kecia
                                                                                   Brooks at kbrooks@firstcarolina.org.


                                                            8
  w      w      w       .    f     i    r     s       t    c        a   r      o      l   i       n      a     .    o     r     g
Selling loans to Charlie Mac secures liquidity
and member relationships
     Did you know that First Carolina       making it a very cost-effective method
offers an alternative liquidity resource    for obtaining liquidity. Plus, your cred-         *       Off-balance sheet accounting
through the sale of loans to the sec-       it union ideally will get a gain-on-sale                  treatment is established for
ondary market?                              to offset the opportunity cost of the                     the loans;
     Charlie Mac is a CUSO that pur-        coupon, as well as the ability to book a
                                                                                               First Carolina offers two products
chases jumbo mortgage and auto loans        servicing asset and realize a servicing
                                                                                          for selling loans to Charlie Mac:
originated by credit unions.                yield on the credit union portfolio.
                                                                                          JumboExpress® for jumbo mortgages
     First Carolina partners with                Other benefits of selling loans to
                                                                                          and CARPooL® for auto loans.
Charlie Mac primarily because it focus-     Charlie Mac include:
                                                                                               Through both of these programs,
es on helping credit unions maintain
                                                  *   Interest-rate, credit and           you can sell loans as servicing-retained
member relationships. Charlie Mac’s
                                                      liquidity risk are lowered;         or servicing-released with customized
flexible servicing options keep the ser-
                                                                                          brand-name servicing. Plus, you can
vicing relationship with your credit              *   Room created for new loans
                                                                                          sell loans in bulk or loan-by-loan.
union, instead of transferring it to                  and revenue growth
                                                                                               For more information or for rates,
another institution where your mem-                   opportunities;
                                                                                          contact First Carolina Senior Vice
bers might be cross-sold other products           *   Rates are competitive;              President and Chief Investment Officer
and services.
                                                  *   Credit unions can withstand         Fred Eisel at 800-585-4317 extension
     There is no up-front cost with sell-
                                                      increased regulatory scrutiny       3284 or by e-mail to feisel@firstcaroli-
ing loans on the secondary market,
                                                      of ALM practices; and               na.org, or visit www.charliemac.org.


Corporates team up for ACH conference
    Credit union professionals responsible for payment systems activities now have a new opportunity to obtain important
updates and information on ACH operations: The Payment Systems Conference, a joint effort sponsored by First Carolina
Corporate Credit Union and VACORP Federal Credit Union.
    More than 70 representatives of 51 credit unions in Virginia, North Carolina and South Carolina attended the inaugural
conference October 24-25 in Greensboro, N.C.
    “The interest in this first conference reinforces our
belief that there is a need among many of our members,
particularly payment systems professionals, for valu-
able news and education regarding ACH operations,”
said David Brehmer, president/CEO of First Carolina.
    A wide variety of credit union professionals,
including compliance officers, auditors and staff from
treasury and ACH departments, participated in the
two-day event.
    Speakers from NACHA, U.S. Central and EastPay
delivered presentations on ACH basics, origination ser-
vices, exception item processing, ACH policies and pro-
cedures, and audit controls and compliance.
    According to keynote speaker Nancy Grant, senior
director of research at NACHA, the future of payment
systems includes “exploring and implementing


                                                                 Rate Tracking
approaches that enable financial institutions to make
the characteristics and value of ACH payments recog-
nizable to their members in a clear, consistent, and
cohesive manner across all transaction types.”
    Feedback from the conference was very positive,               Through October, First Carolina certificates continue to
and plans are already underway for the 2007 event.           outpace Treasuries and yield just above agencies.



                                                                9
People                    ...in the credit union movement

     The South Carolina Credit Union League & Affiliates             Karen Hartley has been hired as a
is pleased to welcome three new employees.                      branch manager at Family Trust Federal
     Kevin Dittman joins the staff of                           Credit Union. She is a graduate of
Palmetto Cooperative Services, Inc. as                          Southeastern Region Credit Union
vice president of print and mail opera-                         School of Management (SRCUS),
tions. He comes from Amspak, the                                University of Georgia and she is current-
largest producer of spools and wheels                           ly attending York Technical College.
                                                                                                                Hartley
for the ribbon and textile industry,                                 Hartley has twenty-six years of
where he spent eighteen years working                           financial service experience, having served a Charlotte,
as printing department supervisor,             Dittman          NC-based credit union as vice president of business
printing and graphics manager, and                              development and branch manager.
plant production manager.                                            Chris Washington has been hired as
     His education includes pressmanship, advanced litho-       vice president of training & HR develop-
graphy, color management, and advanced flexography              ment for Family Trust. He brings with
certificates from Clemson University and an Associate’s         him more than seven years of training
degree in business management from Stratford School of          and development experience and nine
Business.                                                       years of financial services experience.
     Tonya Falkosky has been hired as administrative                 Washington has a Bachelor of Arts
assistant for the League. She brings thir-                      degree from South Carolina State                Washington
teen years of customer service experi-                          University. He has been involved with
ence, working for apartment communi-                            Family Trust for many years, having volunteered on the
ties and leasing companies as a leasing                         Family Trust Joint Advisory Board and the Supervisory
consultant, assistant manager, executive                        Committee.
assistant, and a marketing and leasing                                                 Tyeshia Miller has been promoted to
specialist.                                                                        assistant vice president of fraud & risk
     Falkosky was most recently with           Falkosky                            management. Miller joined Family Trust
Intermark Management Corporation, a                                                in 2002 as a loan officer and was promot-
residential property management company. She holds an                              ed to branch manger in 2003.
Associate’s degree in business from Midlands Technical                                 Miller holds a Bachelor of Science
College.                                                                           degree in sociology and criminal justice
                      Pamela Jennings joins the League
                                                                            Miller
                                                                                   from Bowie State University in
                   staff as an auditor. Prior to joining the    Maryland. She also has a degree in public service from
                   League, she worked with NetBank for          Central Carolina Technical College in Sumter.
                   nine years as quality control auditor and
                   internal control auditor/team leader.            Rick Curry has recently accepted the
                   Jennings also worked with Wachovia as        position of mortgage manager at
                   a bank reconciliation specialist and loan    Palmetto Citizens Federal Credit Union.
         Jennings processor.                                    Curry, a graduate of Youngstown State
     Jennings holds an Associate’s degree in computer sci-      University in Ohio, earned a Bachelor’s
ence, a Bachelor of Science in business administration, and     degree in business administration. He
a Master of Science in management, all from Southern            has been in the financial services indus-
Wesleyan University.                                            try more than thirty years, with more          Curry
                                                                than fifteen years of management experience.
    Carolina Trust Federal Credit Union                             Carol Hall has joined Palmetto Citizens FCU as ser-
welcomes Kathleen Hawn as director of                           vice center manager. She graduated from the University
training and human resources. Hawn                                                of South Carolina with degrees in
brings extensive HR and training experi-                                          finance and management. Hall brings
ence to the credit union, having previ-                                           eighteen years of experience from BB&T
ously managed training/HR for Time                                                and High Point Bank and Trust in North
Warner Cable, Polo Ralph Lauren, and                                              Carolina.
                                           Hawn
Levi’s Inc. Hawn also served on the                                                   Prior to relocating to South Carolina,
YMCA Board of Directors and looks forward to rejoining                            Hall was a member of the Junior League
local community efforts and organizations.                                   Hall
                                                                                  of High Point and served as Assistant
                                                                Treasurer from 2005-2006.


                                                           10
                          The Honor Roll      CU Security Certificate

 Advanced Lending Certificate                 Andrea Quinn               Family Trust FCU   Member Services Level II Certificate
                                              Elizabeth Byars              Founders FCU
 Elizabeth Byars            Founders FCU      Emily Williams               Founders FCU     Elizabeth Byars              Founders FCU
 Melissa Hedrick            Founders FCU      Kellie Shugart             Family Trust FCU   Fannie Booker                    SRP FCU
 Patty Finley               Anderson FCU      Sarah Dorsey                 Founders FCU     Jane Wheelis                    SAFE FCU
 Richard Heaton                 SRP FCU       Tammy Blackwell              Anderson FCU     Teague Poston                Founders FCU
                                              Teresa Moore                 Anderson FCU     Thomas Hardin                Founders FCU
 Consumer Lending Certificate
                                              CU Technology Certificate                     Professional Development Certificate
 Angela Warren       Carolina Foothills FCU
 Atreta Stinson                        Amy McGill
                          Family Trust FCU                        Anderson FCU              Abbe Adams                   Founders FCU
 Kimberly Fowler                       Daniel Parga
                             Founders FCU                  Palmetto Citizens FCU            Lisa Gaytko                  Founders FCU
 Laura Jennings                        Dawn Beard
                             Founders FCU                     Carolina Trust FCU
 Martha Truesdale                      Elizabeth Byars
                             Founders FCU                         Founders FCU              Roy F. Bergengren Award
 Sharon Mobley                         Erin Harper
                             Founders FCU                         Founders FCU
                                       Jacqueline Williams        Anderson FCU              Thomas Jones       Palmetto Citizens FCU
 Credit Committee Award                Lindsey Deerman            Founders FCU
                                       Melissa Hedrick            Founders FCU              Sapphire Award
 James Burgess        Family Trust FCU Thomas Hardin              Founders FCU
                                                                                            Keli Penn                        SAFE FCU
 Credit Union Leadership Award                Financial Management Certificate
                                                                                            Savings Plus Certificate
 Joe Bolchoz          South Carolina FCU Abbe Adams                        Founders FCU
 Karen Harris      Carolina Foothills FCU Cassie Laney                     Founders FCU
                                                                                            Cassie Laney                 Founders FCU
 Thomas Jones      Palmetto Citizens FCU Elizabeth Byars                   Founders FCU
                                                                                            Dreama Cherry              Family Trust FCU
                                          Miranda McGuinness                  SAFE FCU
                                                                                            Elizabeth Byars              Founders FCU
 CU Accounting Certificate                Shirley Reid                     Founders FCU
                                                                                            Jane Murphy                  Anderson FCU
                                          Stephanie Capelle                Founders FCU
                                                                                            Shirley Cathcart           Family Trust FCU
 Heather Pennington              SRP FCU
 Jamie Roof                 Founders FCU      Loan Officer Certificate                      Spanish for Tellers Module
 Jennifer Duncan            Anderson FCU
 Kimberly Fowler            Founders FCU      Adam Barker Spartanburg Regional FCU
                                                                                            Leslie Ott           South Carolina FCU
 Laura Jennings             Founders FCU      Cassie Laney           Founders FCU
                                              Elizabeth Byars        Founders FCU
 Tabitha Melton      Health Facilities FCU                                                  Technology Award
 Tara Swancey      Carolina Employees CU      Emily Williams         Founders FCU
 Tonya Keller               Founders FCU      Melissa Hedrick        Founders FCU
                                                                                            Lana Hefner        Palmetto Citizens FCU
                                              Stephanie Capelle      Founders FCU
                                                                                            Thomas Jones       Palmetto Citizens FCU
 CU Sales Certificate                         Thomas Hardin          Founders FCU

                                              Member Services Certificate                   Washington Award
 Crystal Morrow              Founders FCU
 Dawn Shuler                 Founders FCU                                                 Abbe Adams                  Founders FCU
 Keli Penn                      SAFE FCU      Betsy Campos               Family Trust FCU
                                                                                          Elizabeth Byars             Founders FCU
 Marites Holder              Founders FCU     Denise Wagner                Founders FCU
                                                                                          Keli Penn                        SAFE FCU
 Melissa Hedrick             Founders FCU     Frankie Turner            Community 1 FCU
                                                                                          Stephanie Thorpe        Carolina Trust FCU
                                              Kimberly Fowler              Founders FCU
                                              Lindsey Deerman              Founders FCU
                                              Sherry Spann                 May Plant CU
                                              Susan Hallman              Family Trust FCU

                                        Credit Union Development            cudd@sccul.org


Join the League at ‘07 GAC
    Register today for the 2007 Governmental Affairs Conference at http://www.cuna.org/events/gac07/. For hotel
reservations or other questions about the event, contact Linda Martin (lmartin@sccul.org) at 800-235-4290, ext. 411.




                                                                11
            L e a g u e R e v i e w i s p u b l i s h e d m o n t h l y f o r m e m b e r s o f t h e S ou t h
                                                                                                                      L ea g u e R e v i e w
     Ca ro l i n a Cr e d i t U n i o n L e a gu e & A f f i l i a t e s.
                                                                                                                      P o s t O f f i c e B o x 1 7 8 7 , C ol u m b i a , S C 2 9 2 0 2
            G a r r y L . P a r k s , P r e s i d e n t / C h i e f E x ec u t i v e O f f i c er ,                   p h o n e/ 8 0 0 -2 3 5- 4 29 0                     f a x / 80 3 -7 3 2- 4 26 8
                     L i e u t e n a n t G e n e r a l , U . S . M a r in e C o r p s ( R e t . )                     e - m a i l / b p u g h @ s c cu l . o r g          w e b / w w w . s c c u l .o r g
            B r a n d on P u g h , E d i t or



Innovation key to credit unions’ lending success
Lending Council attendees told to focus on selling the lending experience
     INDIAN WELLS, CA -- Credit                                                  buying is much different from just a
unions wanting to elevate their lending                                          decade ago. Traditional auto lending
programs must differentiate them-                                                has been direct lending, but currently
selves by being innovative beyond                                                96 percent of credit union loan growth
product offerings, a CUNA Mutual                                                 comes from indirect lending and 70
Group lending expert told credit union                                           percent of member growth is coming in
leaders attending the CUNA Lending                                               through indirect lending. Credit unions
Council’s annual conference Tuesday,                                             need to create a total auto-buying expe-
November 14.                                                                     rience for their members.
     “Credit unions and other smaller                                                 “Don’t think it’s out of your hands
financial institutions are challenged by                                         because the lending is done at the deal-
large, global companies for lending                                              er,” Tharp said. “Have the latest E-con-
dollars,” said Judy Tharp, vice presi-                                           tracting automation, make processing
dent, Lending Solution Development                                               available 24/7, and establish dealer
for CUNA Mutual. “It’s difficult to                                              relationships .”                                                       CUNA Mutual’s Judy Tharp discussed innova-
compete with giants like Citi Group                                                   Technology Credit Union, San Jose,                                tive approaches for a successful lending pro-
and Wells Fargo, or dot-coms such as                                             CA, tries to reach members before they                                 gram at CUNA's Lending Council conference.
E*Trade and LendingTree, and even                                                ever get to a dealer. The credit union
retailers like Wal-Mart. They all offer                                          devotes a number of pages on its Web                                       Allegacy FCU, Winston-Salem, NC,
deep-pocket solutions the moment                                                 site to the vehicle-buying experience,                                created a real estate CUSO developing
your member is ready to buy.”                                                    promoting 100-percent financing on                                    its own real estate community, Tharp
     Tharp said products, much like a                                            most vehicles, a Web-based car buying                                 noted.
commodity, tend to be the same no                                                locator/consultant, dealer specials, and                                   Near-prime lending has the biggest
matter who offers them, so credit                                                discounts on green-car loans.                                         upside, Tharp said. She noted recent
unions must differentiate themselves.                                                 Vehicle lending represents one-                                  research indicates 42 percent of the
She said credit unions should move                                               third of credit unions’ lending portfo-                               population has a credit score under
more toward selling the experience                                               lios and they do more than 15 percent                                 700, which is generally considered the
rather than just the product: being at                                           of the auto lending in the United States                              cutoff for prime lending.
the point-of-sale; lending deeper                                                according to Callahan & Associates                                         Twenty-eight percent fall into the
beyond the best credit scores; and com-                                          research. Conversely, credit unions                                   near-prime category. Prime borrowers
pleting transactions quickly through                                             have only two percent of all mortgages,                               typically don’t generate as much return
use of technologies such as online deci-                                         despite credit union members compris-                                 and sub-prime borrowers may be too
sioning.                                                                         ing 30 percent of the population.                                     risky, but Tharp said near-prime bor-
     Marketing innovation is crucial,                                                 Tharp noted mortgages are a con-                                 rowers are a “sweet spot” of profitabili-
Tharp said. She cited a well-known                                               tinuing growth opportunity, and with                                  ty if credit unions follow best practices.
retailer that has grown from one store                                           U.S. homeownership rates apparently                                        To succeed in today’s lending envi-
to more than 11,000 stores worldwide                                             stalled after a decade of growth, it is                               ronment, Tharp said a credit union
in 20 years, one that adds new stores                                            more essential than ever to find busi-                                must have a lending strategy tied to the
daily. It had $6 billion in revenue in                                           ness.                                                                 credit union’s overall business strategy,
2005 and has 40 million customers each                                                “Credit unions have more expertise                               develop and execute a lending action
week--and the product is coffee. Tharp                                           with refinances, than new-purchase                                    plan, and move from just offering
said Starbucks has done a great job in                                           mortgages,” Tharp said. “With Realtors                                products to delivering a total buying
converting a commodity product sale                                              controlling 70 percent of all new-mort-                               experience.
into the coffee experience through                                               gage transactions, it’s important for
music, internet connections, newspa-                                             credit unions to develop more pur-                                         CUNA Mutual Group is the leading
pers and comfortable sofas.                                                      chase-money expertise and business                                    provider of financial services to credit unions
     Vehicle lending is a prime target                                           development in the real estate commu-                                 and their members worldwide. For more on the
                                                                                                                                                       company, visit www.cunamutual.com.
for selling the experience, but auto                                             nity.”


                                                                                                                 12

				
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