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CUs Steadily Raising Deposit, Loan Rates

WASHINGTON-Credit unions have been steadily raising the rates they pay on certificate products of all maturities in response to the Fed's hiking of short-term rates, even though they remain reluctant to lift the rates they pay on core savings products.

Data compiled by DataTrac Corp. shows that average rates paid on three month CDs have risen since last year by 75 basis points to 1.9%; for six months by 59 BPs to 2.33; for one year by 108 BPs to 2.82%; for two years by 56 BPs to 3.29%; three years by 81 BPs to 3.65%; four years by 71 BPs to 3.95%, and five years by 59 BPs to 4.29%.

But average rates paid by credit unions on regular share accounts remain stuck near all-time lows of just 0.77%; while share draft (checking) rates hover just above a record low of 0.44%; and the average paid on money market funds remains at only 1.14%.

DataTrac follows rates for 8,000 financial institutions, including 1,000 credit unions.

Thieves Break Into Branch, Steal Vault

NEPTUNE BEACH, Fla-In a new twist on credit union robberies, a team of thieves disarmed the phone and alarm lines at the Jax FCU branch early on the morning of May 2 and made off with the credit union's entire vault.

Police believe the robbers loaded the five-foot by three-foot vault on a dolly, then rolled it out the back door, before loading it on to a stolen truck with a lift.

The vault is believed to have contained at least $5,000 in cash.

MBNA Acquires Nexstar

WILMINGTON, Del. -MBNA Corp. said it has closed on its acquisition of Nexstar Financial Corp., giving the credit card giant new entry into the credit union market through Nexstar's partnership with more than 100 credit unions. St. Louis-based Nexstar offers an integrated call center and web-based mortgage loan program for credit unions, called CUMAC. The deal will allow MBNA to offer private label co-branded home-equity loans through its more than 5,000 affinity partners. MBNA, the nation's largest credit card bank, recently began offering co-branded credit cards to credit unions.

Elan Acquires 3 More Portfolios

MINNEAPOLIS-Elan Financial Services, a unit of US Bancorp, said it has acquired two more credit card portfolios from credit unions. They are from Bellco FCU, Wyomissing, Pa., with $1.5 million in receivables and 1,040 accounts; and Lakeshore Community CU, Avon Lake, Ohio, with just $365,000 in receivables. Both deals were brokered by Keesler Financial Services of Boston

CUNA Totals Kids' Deposits

MADISON, Wis.-CUNA is projecting that credit unions significantly exceeded last week the $1.4 million in deposits collected from kids as part of the National Youth Savings Challenge in 2004. This year some 211 credit unions participated in the program, up from 143 CUs in 2004. "Collectively, these credit unions aim to safely care for over $2 million from more than 38,000 total youth member deposits during the week," CUNA said. "Additionally, participating credit unions hope to open accounts for 5,700 new youth members."

CUP Pays $160,000 Dividend

ST. LOUIS-Credit Union Partnership, Inc. (CUP), a subsidiary of the Missouri Credit Union Association, issued a combined rebate totaling $160,000 to participating CUs. In its fifth consecutive year of issuing a reimbursement, MCUA's board agreed to increase this year's refund to include any return on equity above 5%. The refund applies to credit unions' 2004 participation in the core products of CUP, which include: item processing, check processing, credit cards, shared branching and lending products. A number of participating credit unions chose to re-invest the money back in MCUA's efforts.

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