Current Category: Credit Union Events

A new consumer protection law, the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (Credit CARD Act) has turned into a nightmare for credit unions. This legislation, originally supported by credit unions, was designed to curb abuses in the credit card industry; therefore, the legislation was not a problem for member-centric credit unions issuing credit cards. However, on July 22, 2009, the Federal Reserve Board issued its final interim rule and all open-end lines of credit were suddenly included. This rule now affects all revolving lines of credit (i.e. Comfort Cash), signature loans, home equity lines of credit, and other loan types that are permitted under open-ended lending.

Under the rule, credit unions and other creditors must mail or deliver a periodic statement to borrowers for open-end credit 21 days before the payment is due. Otherwise, the creditor may not treat payments as late for any purpose, including filing a credit report even if the payment is late.

So what is the problem? A majority of members have the convenience of payroll deduction which falls on various dates. Many credit unions, including Service One CU, let their members establish their own payment date and payment frequency. Over 3,000 SOCU members have the convenience of open-end lending arrangements and receive monthly or quarterly consolidated statements. The problem is that these statements do not meet the requirements of a 21-day notice, especially if a member has chosen a weekly, bi-weekly, or semi-annual payment frequency. The requirement for a 21-day notice is also not met if the member’s preferred date falls on the 1st through the 26th day.

In order to comply with the CARD Act and meet the compliance deadline of August 20, 2009, Service One Credit Union made a decision to move all due dates on open-ended loans to the 28th day of each month. All loan descriptors for statements will be changed in order for members to know whether their loan is open-ended or close-ended – a monumental task in itself.

We want the membership to understand these requirements, and to know that it is our intent to comply with federal regulations. We will continue to give members the option to utilize their current payment method through automatic payments. Legally, however, the official due date for open-ended loans will be the 28th day of each month.

Please let me know if you have any questions. We appreciate your understanding as we stretch our personnel to meet the compliance deadline.

Unrestricted use by bankers' of federal bailout money has hit your credit union squarely in the pocketbook. Two Bowling Green banks have taken bailout money and are offering inflated CD rates while Service One CU has maintained a sound balance sheet by keeping loan and deposit rates conservatively priced. Yes, I know (sigh), "life is not fair."

Chairman's letter: Banks costing taxpayers

WARMINSTER, Pa. (1/6/09)--Banks are forcing credit unions to spend millions of dollars that could be used to better serve members, according to the chairman of a Pennsylvania credit union.

Joe Yerkes, chairman of Freedom CU in Warminster, recently wrote a letter to the editor of The Intelligencer (Dec. 29) saying banks are misusing government bailout funds and are costing credit unions millions of dollars in litigation.

Bankers' lawsuits against credit unions take away a consumer's right to choose a credit union for financial services, he said. The money credit unions spend defending themselves could be used to offer better rates on deposits and loans, he added.

And while banks accept bailout money, credit unions have never received any type of taxpayer support, Yerkes said.

Hi friends,
I recently returned from Hong Kong where the World Council of Credit Unions conference was held this year. Service One has supported this organization for ten years and we have seen great progress in the number of people served across the globe by credit unions. People are so grateful to have a financial institution that cares about their needs, not one that is out to enrich stockholders. Many WOCCU projects serve many small communities and allow financial independence to overcome abject poverty. What a wonderful group for us to be associated with!!

Dr. Richard Miller, Chairman of the Board at Service One Credit Union, presented a break-out session on some original research that he conducted on CEOs from Ireland, Canada, Australia, and the US. His session was highly rated as we can be proud to have had him represent us.

Another US speaker, Senator Paul Sarbanes (of Sarbanes-Oxley fame) talked about the importance of transparency and accountability in organizations. Speakers from six continents inspired attendees to continue their work.

"Credit union leaders from around the world met in Hong Kong for the 2008 World Credit Union Conference, July 13-16. WOCCU's World Conference is the only meeting of its kind, bringing together credit union leaders from countries from around the world. In addition to providing excellent networking opportunities, the four-day program focused on current industry issues and innovative ideas that can be implemented in credit unions everywhere."

I received the following letter yesterday and asked permission to print it for your reading enjoyment.

Dear Ms. Brown:
I am the daughter-in-law of Bill Steinwachs, married to his son Bill Jr
for 24 years. I just finished reading the story in our local paper, The
Gleaner, about the harvesting of the timbers from the Poole Mill. That
the wood has been saved from deterioration and will be restored as part
of such a worthwhile project is the perfect way to preserve the backbone
of the Mill, along with its history. As a young boy, my husband got off
the school bus every afternoon at the mill to help out with afternoon
tasks, and spent many Saturdays with his cousins bagging feed made from
loads of corn farmers hauled in. He recalls arriving at the Mill on
Saturday mornings at 6 am to find up to 20 farmers already in line with
their loads of grain to be ground into feed for their livestock. The
Poole Mill was truly a family business in every way. My husband has a
work ethic that exceeds many that I have encountered in my lifetime,
born of his work at the Mill and on the family's farms.

Should your credit union have a grand opening ceremony when the new addition is
completed, we would love to visit and bring our 8 year old daughter
Kelsey to see a piece of family history become part of environmentally
responsible construction at its finest.

Sincerely,
Kelly Steinwachs

Today, the Poole Milling Company's building no longer stands on the main thoroughfare of Poole, Kentucky. Service One Credit Union offered to level this historic, yet now dangerous, abandoned structure and use the timbers from three floors in its "green" addition. The owners, Jim and Bill Steinwachs, agreed to sell the timber when they were assured that the history of their former feed business would be displayed at the Credit Union's Campbell Lane Branch.

The original Poole Mill was built in 1830, destroyed by a devasting fire in 1923, and rebuilt in 1924. It served Webster County, Ky for nearly 150 years producing flour, meal, and animal feed.

Dr. Marvin Russell, former Dean of Ogden College, WKU, was born across the street from the mill. He remembers hearing the single piston engine chugging throughout the day - "not an unpleasant sound as I remember." He also recalls skating and fishing in the mill pond, exploring the mill's inner depths, and even working for the owners during the summers of his boyhood. Dr. Russell, a member of Service One Credit Union since 1975, offered valuable assistance in facilitating the purchase of these beautiful timbers. He stated, "The town's people believe that most of the timbers were from virgin trees."

Over fifty people attended the groundbreaking ceremony at the Campbell Lane office on May 22, 2008. Here is a copy of my comments.

“It takes a Community Team to make LEED Certified 'green' happen, and I appreciate all the support from the board and community leaders who value energy-conservation and environmental sustainability.

A revolution is happening in the built and design industry. The US Green Building Council predicts that humans will construct more buildings in the next fifty years than in the total of human history, and smart buildings will need to play an unprecedented part in our human future. Unbeknownst to many, buildings emit more greenhouse gasses than automobiles, and green building practices will necessary to insure a healthy future for humanity.

Service One’s building plans are evolving even today as we try to contain rapidly escalating costs. Our goal is to achieve a near-zero energy building, certified at the LEED platinum level. To reach this prestigious designation, our architect has developed a tightly enclosed building envelope complete with earthen berms. We plan to install geothermal heating and cooling, and photovoltaic cells, or solar panels, as soon as that is feasible. A bio-retention basin, or rain garden, will filter storm water, and a water cachement system will allow us to irrigate without going into community water supplies. Vegetation and plant material on the roof will provide 25% greater efficiency than ordinary insulation material. This green roof will catch rain, holding at least one inch that curtails storm water runoff and pollution entering our water supply. It will also dissipate the asphalt-induced heat-island effect, and last up to fifty-years.

We believe that 'Green' leadership demonstrates Service One’s commitment not only to improving the quality of life in our community for our members, but to offering a healthy working environment for our employees. Our green design will create a pleasing environment for employees because of natural daylighting and petroleum-free interior materials. These employees helped direct the design of their future beautiful addition

Thank you for your interest and attendance and I hope to see the Bowling Green region sprout many green roofs in the near future.”

Service One Credit Union broke ground on its highly anticipated Campbell Lane Branch “Green” Addition on Thursday, May 22, 2008 at 11:30 am. The following comments were excerpted from Dr. Richard L. Miller, Chairman of the Board at the groundbreaking ceremony.

"This new “Green” addition will be the first of its kind in Bowling Green."

"Credit unions as democratic, member-owed financial cooperatives, which exist to serve their members and communities. They serve members from all walks of life,” Miller stated. Miller talked about joining the credit union when it was in its infancy. He believe that the cooperative showed a genuine interest in meeting his needs as a faculty member at WKU. He continued by saying, “However, I have discovered that the charter of this credit union goes far beyond simply meeting the financial needs of its members. Our charter calls for us to take an active role in promoting the welfare of our community. . .. We have previously served the social and financial needs of our community and now assume the responsibility of meeting its environmental needs as well.” Miller concluded by stating, “We are undertaking one of the most ambitions green projects in the state, designed to reach the highest standards of environmental conservation available. By increasing efforts in such responsible construction, we help to assure our children and grandchildren of a more secure environment.”

My comments at the ground-breaking ceremony will be included in the next blog entry.