WASHINGTON-There's no question where the new Congress' and the Obama administration's legislative priorities will lie-economic stimulus. The question is how credit unions can demonstrate that some of their pet projects, such as lifting the cap on member business lending and capital reform, fall right in line with those priorities.

MADISON, Wis.-The economic forecast for 2009 leaves a lot to be desired, but the new year could provide more opportunities to benefit from the banking crisis before a slow recovery begins, several economists say.

I still remember the toughest question posed to me during my first job interview at the National CU Foundation: "How is your experience at a for-profit international management firm relevant to running a non-profit credit union foundation?"

In this, the centennial anniversary of credit unions, I can think of many examples throughout my 22 years in the credit union world that personify the credit union spirit. But perhaps none so singularly as a recent mortgage modification. In this instance, one of our members had begun to have difficulty making his mortgage payments. Our staff reached out to him and discovered he is a member with special needs and is confined to a wheelchair. Because of the unique accommodations that he requires in his home, keeping him in it was particularly important. I have great satisfaction in knowing that our efforts have helped him during this challenging time.

American households are beginning to receive some good news about the severe economic downturn: Interest rates on mortgages and consumer loans are falling. Rates on trillions of dollars of existing bank loans owed by households are now above current market rates, and interest rates are likely to fall more. The result will be a refinancing bonanza for smart credit unions wishing to expand their loan portfolios.

FEBRUARY

By the time credit unions get to Washington in late February for CUNA's GAC, there may not be any room for them. That's because, as the new year begins, it's hard to find anyone or any special interest who isn't currently in DC with their palms up seeking a bailout or a handout or even the scraps that might fall off the table.

EAU CLAIRE, Wis.-Royal CU, the fifth largest credit union in the state, has reached over the border to Minnesota and merged with troubled REAL Financial CU.

MADISON, Wis.-Credit unions and vendors alike now have a detailed guide to the due diligence process thanks to nine months of work by a task force put together by CUNA.

SLEEPY EYE, Minn.-Focusing on the long-term for both the credit union as a whole and the relationship with each individual member has helped Southpoint Federal Credit Union earn the number-two spot on Callahan & Associates' Return of the Member overall rankings.

WEST PALM BEACH, Fla.-It's an annual rite when previewing a new year to predict it will be "challenging." For 2009, that prediction is likely to be an understatment.

SANFORD, Maine–Firefighters are crediting employees of a branch of Ocean Communities FCU here with stopping a fire from destroying the facility. Employees dialed 911 approximately 10 minutes before closing time after noticing smoke coming from the building’s eves. Firefighters found a halogen lamp had overheated and had already charred the surrounding area. Firefighters said had the call not been made, the building would likely have caught fire.

SPRING, Texas–Police said they believe an armed robbery at a branch of Investex Credit Union here was an inside job. According to police, Dorcell Devon Johnson, 18, a member services rep at ICU, conspired with Dominique Sherrard Ervin and Carl Edward Preston to steal $200,000 in the robbery. Police are further alleging that Johnson admitted planning and robbing the same credit union a few months earlier.Police said that Johnson was working on the day that Preston and Erving stormed into the credit union with shotguns in hand. After taking a pistol and cell phone from a security guard, the pair ordered the guard to the vault and ordered employees to stuff money into a bag. Ervin fired a shot into a security monitor that was in the vault, before fleeing with Preston.An FBI agent investigating the robbery told local media that suspicions arose after security tapes showed that Johnson appeared “unafraid” during the robbery. Johnson had worked at ECU for two years, but is no longer with the Houston-based credit union. The The Harris County Sheriff's Office found three shotguns and money that had been stuffed in stacks with straps marked with the credit union's name in Johnson's apartment. About $6,000 of the money stolen in the two heists has been recovered.

NEW YORK–An auto industry expert is forecasting a “small pop” in auto sales
in January but that auto sales will otherwise remain flat through the first
half of 2009.
Chrysler has already announced to dealers they will continue to offer huge
rebates into 2009 to offset the loss of leasing and low financing, according
to David Jacobson, CEO of GrooveCar, Inc. The move helps reduce the loan to
value on these loans, offering better equity to the lender, which in turn
results in more approvals and more cars sold, he said.
”As a result of the GAMC bailout, GMAC said they will offer low financing
again in 2009. However low financing is mostly available on certain models
and for shorter term loans,” Jacobson explained, noting that rebates will
also play a big role here.
”Although we expect car sales to make a small pop in January, we expect that
the lack of consumer confidence will spoil sustained increases in sales
through the first half of the year,” he suggested. “By the second half, a
combination of pepped up demand, access to funds, great prices (rebates,
etc.) and the returning confidence of both consumer and manufacturers should
drive up sales. The manufacturers will then start to build more cars and
dealers will return to local marketing to get their piece of the pie.”

MADISON, Wis.–The much-debated credit union “brand” is the subject of new analysis released by the Filene Research Institute. The study, titled “The Credit Union Brand: What Is It Good For” and authored by Larry Compeau of Clarkson University, notes that much discussion has revolved around a national credit union brand, while relatively little research is focused on the brand identity of individual credit unions.The topic deserves discussion, according to Filene, because in recent years credit unions have rapidly expanded from original sponsor organizations to broader membership groups based on multiple employer groups, large metropolitan areas, countrywide professional groups, and even virtual relationships. With broadening fields of membership came name changes to better reflect who individual credit unions are serving.The new analysis involves qualitative research approach using a targeted in- depth interviews with a variety of credit union types, members, and employees across the United States. Among the key findings:• Members hold a strong brand identity of their individual credit union. They describe their credit union as reliable, friendly, helpful, and informative.• Employee perceptions of a credit union brand identity are weaker than member perceptions.• Except for long- tenure members who may have helped build their credit union, credit union members tend not to differentiate credit unions from banks.• One point of differentiation for members is that credit unions are “a little more personal” but “not as sophisticated” as banks.

CINCINNATI–Communicating Arts Credit Union has declared a 2008 bonus dividend for members of $140,000. The bonus will be calculated at 5% of the total dividends the member earned on savings during the year and 5% of the interest the member paid on loans durin gthe year.

DALLAS–A bit of good news for the new year? Declining mortgage rates have pushed mortgage applications in the U.S to a five-year high. The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan rose to 1,245.7, the highest level since 2003.Brian Turner, director of Southwest Corporate Advisory Services, noted, “Interestingly, the MBA’s refinancing measure fell 0.4% to 6,733.8, still the second highest level since December 2007. The average rate on a 30-year fixed-rate loan dropped to 5.14%, the lowest level since records began in 1990. The average on a 15-year, fixed-rate mortgage declined to 4.91%, the lowest since March of 2004.“The drop in mortgage rates has been one of the few bright spots in the mortgage market devastated by record foreclosures and falling home prices,” observed Turner. “Whereas lower rates have stimulated opportunities to reduce monthly payments, they have so far yet to stabilize sales. The MBA purchase index increased to 320.9 last week, from 316.4 the prior week. The measure reached an eight-year low of 248.5 in mid-November and peaked at a record 529.3 in June, 2005.”

FORT WORTH, Texas–American Airlines FCU will distribute about $11 million in bonus dividends to its members, a new record for the credit union.The bonus dividend is based on dividends earned on qualifying share accounts and/or interest paid on applicable loans in 2008. Both the savings and loan portions of the dividend were calculated at an annual rate of 3%.This year, an additional $80 bonus was give to members who maintained three or more account categories, as well.

WASHINGTON–With the Treasury Department's announcement late Monday that it will provide $6 billion in support to GMAC LLC, the agency has officially allocated more money than it actually has on hand in the Troubled Asset Relief Program.Of the $350 billion it has received from Congress, the Treasury has pledged $358.4 billion, leaving observers and industry participants confused about how the agency can allocate money it does not have. By law, the Treasury must request the remaining $350 billion authorized by Congress for Tarp and give the legislators 15 days to object, but it has not yet made the request."It's like when they overbook airlines … ; if everyone shows up, there aren't enough seats. That sounds like what they did, and that's not good," said Kip Weissman, a partner in Luse Gorman, a Washington law firm.The Treasury defends its move by distinguishing between funds that have been committed and how much has actually been disbursed. Of the $350 billion Congress initially gave it, $217 billion has been deployed, leaving it flexibility to continue pledging money for other purposes."In the very short term, the allocated but not yet disbursed Tarp balances, in conjunction with the powers of the Federal Reserve and the FDIC, give me confidence that we have the necessary resources to address a significant financial market event," Treasury Secretary Henry Paulson said on Dec. 19.In a conference call late Monday, a Treasury official dismissed suggestions that Tarp was now essentially in deficit. Instead, he said, on a short-term, cash-flow basis, the agency has not exceeded the first $350 billion tranche so that it is "not fair to say we've overcommitted." –Cheyenee Hopkins

ALEXANDRIA, Virginia–Following the California Department of Financial Institution's appointment of NCUA as the receiver of Valley CU, San Jose, the federal regulator entered into an agreement with Citizens Equity First CU, Peoria, Illinois, to sell certain assets and liabilities of Valley to CEFCU.NCUA had been operating Valley as conservator since the California DFI placed Valley into conservatorship on Sept. 2, 2008. At the time of receivership, Valley had approximately $205 million in assets. Valley was established in 1953 to serve members of the telecommunications industry and grew to serve over 25,000 members. 

Members of Valley experienced no interruption of credit union service as their credit union was purchased by Citizens Equity First Credit Union. The $3.6-billion CEFCU will continue operating branches of Valley.