Treasury launches plan for 'unbanked'

I found this article in CUNews today. It is encouraging to see this type of financial literacy awareness beginning to emerge. Let us know if you need a program for your workplace.


WASHINGTON (4/30/08)—The U.S. Treasury Department Tuesday launched an initiative to improve financial education efforts and increase access to credit union and bank accounts for Americans "currently outside of the financial mainstream."

The Community Financial Access Pilot will provide low- and moderate-income people in selected communities with needed access to financial services. The initiative was recommended by the President's Advisory Council on Financial Literacy.

"Through this pilot, Treasury will work with banks, credit unions, community leaders, and educational providers to target the nearly 10% of American households estimated to fall outside the financial mainstream," said Dan Iannicola, Jr., Treasury deputy assistant secretary for financial education.

Iannicola announced the initiative in Jacksonville, Fla., one of eight communities participating in the new pilot program. The other participating communities include Brownsville, Texas; Cowlitz County, Wash.; Eastern Kentucky; Mississippi Delta, Miss.; Fresno, Calif.; Philadelphia, Pa.; and St. Louis, Mo.

"Having a bank account is a critical part of being able to participate in our vibrant economic system," said Charles Schwab, chairman of the President's Advisory Council on Financial Literacy.

"This pilot will target the low-income families who need access to basic financial services, so they can stop paying outrageous fees just to cash a check or pay a bill. It will also give low-income families access to basic financial education so that they can begin to build a better future."

The number of families using alternative financial service providers is estimated to be as high as 50 million, according to Treasury.

The Credit Union National Association (CUNA), leagues and credit unions also support financial literacy efforts for all Americans. CUNA earlier this week announced new features to its financial literacy clearinghouse: cunapfi.org.

The clearinghouse provides information for anyone in the credit union movement looking for statistics, methods, and materials to improve the ability of members and potential members to manage their money wisely using credit union services.

Among the most recent additions to cunapfi.org:

Evidence and ideology in assessing the effectiveness of financial literacy education. (Research analysis from Lauren E. Willis, University of Pennsylvania Law School.);


A look at the financial state of Gen X and Gen Y." (A new study from the American Savings Education Council and AARP.)


A 2008 parents and money survey.(The views, behavior, and knowledge of spending, saving, borrowing, and earning money of American teenagers between the ages of 13-18, as seen through the eyes of their parents, from the Charles Schwab Corp.)


"Here's your chance to tell the government what to do;" an online soapbox for comments for the President's Advisory Council on Financial Literacy—requires free registration/login.


Federal Deposit Insurance Corp. statement on financial literacy and education. (Congressional testimony from the FDIC's Robert W. Mooney.)
"We hope that financial literacy advocates throughout the credit union movement will use cunapfi.org as a jumping-off point for their efforts to help people of all ages and economic means make better use of their income and build wealth," Mark Condon, senior vice president of CUNA's Research & Advisory Services, said recently.

The following article from CUNews caused me to again just shake my head. What are they thinking?

WASHINGTON (4/22/08)—The ability of the leader of the American Bankers Association to hold two contradictory beliefs simultaneously—at least where credit unions are concerned—was questioned in the April 21 issue of American Banker.

Confused yet? asked a subhead in the publication's "Washington People" section. The short article pondered whether ABA President Ed Yingling has been "flipping through the pages of George Orwell's '1984,' which defined 'doublethink' as the power to hold two contradictory beliefs simultaneously."

The article noted that after the Treasury Department outlined its blueprint for financial regulatory reform, Yingling issued a statement that said, "We are no more ready to abandon the thrift charter than we are to abandon the American family dream of living in a house that you own."

That release was closely followed, the article said, by an ABA letter of praise for the Treasury plan, which suggested merging the credit union and bank charters, by saying the two types of institutions are very similar and should be treated as such.

"The letter raised eyebrows among some observers, since, generally speaking, the bank and thrift charters are considerably more alike than the bank and credit union ones.

"For example, credit unions are cooperatively owned not-for-profits, as opposed to banks, which are for-profit institutions owned by shareholders. In contrast, both bank and thrifts are for-profit organizations," American Banker noted.

The article said the ABA "rejected the claim that the ideas are contradictory."

Last night at the 45th Annual Shareholders’ Meeting, I had the pleasure to announce to an enthusiastic membership that Service One plans to build a “green” addition to the Campbell Lane Office. David Bryant, Architect, and Rob Atnip, SOCU’s Facilities Manager, displayed the plans for this new addition during the Financial Fair and discussed the concept with members. The plans show a well-insulated, sustainable, energy-efficient building that will add needed space for employees and board members at that location, and serve as a community room after working hours.

The design utilizes the following technology:
1) natural daylighting;
2) geothermal heating and air conditioning;
3) photovoltaic cells, or solar panels;
4) a water containment system which recycles water for irrigation and toilet flushing;
5) a roof with vegetation rather than asphalt shingles;
6) bio-retention areas for storm water runoff; and,
7) natural and recycled materials for interior finishes along with energy-star appliances.

We expect this addition to be certified at the “platinum” level by the U.S. Council for Green Buildings. Rebates and incentives will be available from this council as well as from TVA. We appreciate the assistance that BGMU and TVA have given in planning for electric generation from the solar panels and the geothermal technology.

I am very excited about this project as it will add value to the membership and serve as a model in the community for green building practices.

This article tickled me. Thank you to the San Antonio Express-News and David Hendricks. Enjoy.


David Hendricks: Man, credit unions have really got their nerve

Those darn credit unions. They're at it again, trying to lure business away from banks.

Can you believe it? The credit unions are attempting to lend a little more of their money to small businesses.

Shame on them.

Credit unions are just trying to take advantage of banks, now that banks are crying big tears after being wounded by all the securities they bought that were tainted with subprime mortgages.

As a result, banks have had to raise their interest rates and their loan standards, leaving small businesses out of the picture.

Oh, wait. Many small businesses were already out of the picture. Banks were sure subprime mortgage securities were safe and could return bigger yields than loans of less than $100,000 to little-bitty companies.

Back in the days when banks profited by lending to small companies that grew bigger and took out even bigger loans, credit unions had no limits on lending to small companies.

That's because credit unions were too small themselves to lend to businesses. They were doing what credit unions, with their amateur, volunteer directors, were supposed to do. They simply took deposits and made car, vacation and Christmas shopping loans.

Some of those darn credit unions became too popular. They collected so much in deposits that they found they could write loans for small-business owners who were credit-union members. Members, after all, own the credit unions.

Small-business owners had to ask their credit unions for loans because banks increasingly stopped making them, especially as credit crunches set in.

A safer buck could be made, bankers decided, by making gigantic loans to gigantic companies. Who can make money writing $50,000 loans to companies that need just a couple more trucks and some tools?

That's when credit unions became alarming, and banks knew what to do. They hired lobbyists to make sure the credit unions didn't get too big for their britches. Congress set things straight in 1998 by limiting credit-union business loans to 12.25 percent of any credit union's assets.

That meant a credit union with $90 million in assets could make only about $10 million in commercial loans. Bankers felt better.

Many of the bigger credit unions have reached the limit. Small businesses, after all, have hardly anywhere else to turn. Some banks actually avoided making business loans and put more effort into locating other sources for their giant loans, charging finder fees instead of interest.

So here we go again: The uppity credit unions want Congress to lift the asset limit on small-business lending to 20 percent.

Some misguided congressmen who like credit unions filed a bill a couple of years ago to raise the limit. Banks weren't worried. They knew the leadership of the congressional committees in Washington would sit on the bill.

Not anymore. Another political party has control of congressional committees. That blasted credit union bill is back and has some extra support this year.

Banks know what to do. They have their lobbyists back on the job.

Maybe, just maybe, the world will remain safe from those darn credit unions that want to lend to small businesses.

Web Posted: 02/26/2008 08:27 PM CST
San Antonio Express-News

WASHINGTON (2/25/08)--America Saves Week kicked off Sunday, with organizations--including the Credit Union National Association (CUNA) and credit unions--encouraging people across the nation to save and build wealth, not debt.

This year's focus is encouraging people to save through automatic transfers into a savings account.

Many states have issued comparable savings week proclamations. Just two examples: Washington has declared Washington Saves Week, while Florida has its Florida Saves Week.

Washington Gov. Chris Gregoire urged organizations to educate residents about the importance of saving money. The state credit union regulator, the Department of Financial Institutions, is among the organizations offering free financial literacy training to high school teachers in the state.

Cities have followed suit. Philadelphia Saves is sponsored by the Consumer Credit Counseling Service of the Delaware Valley. Partnering with Philadelphia Saves is American Heritage FCU, Franklin Mint FCU, and Mainline Health Employees FCU, according to the Pennsylvania Credit Union Association.

The week is also designated MilitarySaves Week. Many installation credit unions and banks will offer reduced minimum deposits for savings accounts and have special offers to help service members make short- and long-range savings plans, according to the Department of Defense (US Fed News Feb. 20).

A recent survey by Thrift Savings Plan found that of nearly 20,000 uniformed and civilian federal employees, less than 21% of active duty service members are saving for retirement. They cited lack of funds as the key reason for not contributing to a savings or retirement account.

Of course, credit unions aren't tied to promoting savings just one week a year. Next week, March 3-7 is National Consumer Protection Week, according to the National Credit Union Administration, and some credit unions will urge savings at that week's events.

The National Youth Saving Challenge, a project wherein credit unions encourage youth to make deposits at their credit union, occurs during National Credit Union Youth Week, April 20-26. It's a free program that helps credit unions build strong savings relationships with youth and their families.

I received the following information in today's email and believe it to be valuable. If you have any problems understanding your credit report, be sure to let one of SOCU's employees help you decipher it.

2/4/2008 - Daily Cents article
Get Your Credit Reports Ready...FICO 08 is Coming
If you have ever applied for a loan, you have undoubtedly sat there having heart palpitations while your credit report is being run to determine your FICO score. You are thinking back on those late payments you made while you were in college 10 years ago or the $275 credit card bill that you just chose to ignore when you were 21-years-old (and obviously had more pressing things to think about…).


Well, the current FICO scoring system as we know it is getting an overhaul, and the result is FICO 08. FICO 08 will be complete this spring and is designed to help lenders reduce loan default rates by 5-15%. The good news is that the new system is designed to cut consumers a little slack on the occasional late payment but will come down harder on habitual offenders.


Scores will range from 300-850 and will take into consideration the same factors as the old version including payment history, length of credit history, amount of debt, ratio of debt to available credit, and recent new credit.



So if you haven’t done it lately, now might be a good time to get a free copy of your credit report and strategize on how to best manage your debt and credit history…or you could always go run a marathon instead – it might be less painful.