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Huffington touts Move Your Money on CNN John King show

Huffington Post publisher Arianna Huffington touted the Move Your Money campaign in an interview on CNN's John King show Wednesday, saying the campaign provides an opportunity for consumers to move money from big banks to community banks and credit unions.

The Post originated the campaign over consumers' anger at banks for the financial crisis and economic turmoil. "We've been waiting for government to end too big to fail banks. It's not going to happen, even with a new financial regulation bill. So here's an opportunity for people to just move their money from the big banks into community banks, credit unions," she said.

She noted "deposits up to $250,000 [in the local institutions] are guaranteed so there's no risk. And that way they're able to support institutions, which are supporting their communities [and] are more likely to lend so small businesses can create jobs."

The campaign matters to individuals "who feel empowered just because they feel like they can do something," she said.

Huffington said the campaign is not about revenge for big banks but is "more about making sure that families understand what is in their interest. We need great financial literacy. We need to understand what is at stake with our credit cards, with our accounts, and we need also to recognize that we have tremendous power."

News of the Competition

Wells Fargo & Co. plans to close its consumer-finance branch network and cut 3,800 jobs (Bloomberg.com July 8). Wells Fargo purchased Wachovia Corp. for $12.67 billion in 2008 and is streamlining operations and reducing redundancies as it merges the two operations, Bloomberg said. The lender, the fourth-biggest U.S. bank by assets, will post a restructuring charge of $185 million--with $137 million, or two cents per share--in the second quarter, according to the bank's statement released Wednesday. Wells Fargo said it will close 638 independent consumer-finance branches and stop issuing nonprime home loans ...

Citigroup Inc. has agreed to sell roughly $900 million of private equity investments, following a plan announced in 2009 to reduce the U.S. bank's assets, said sources familiar with the matter (Bloomberg Businessweek July 7). Operating under its 10-year-old Citi Private Equity unit--which was put up for sale last year--the bank is selling buyout investments, the sources said. Citi Private Equity is one of more than two dozen businesses marked for sale or eventual closure by CEO Vikram Pandit in early 2009. The divestiture plan was instituted after the bank's $45 billion taxpayer bailout ...

Wal-Mart's Sam's Club is joining forces with lender Superior Financial Group to offer loans of up to $25,000 to its small business members (Associated Press via LoneStar Leaguer July 8). The program is among several from the huge retailer offering bank-like services to customers to help them spend more in the community, APsaid. The program will concentrate on minority-, veteran- and women-owned businesses. After a November survey, Sam's Club said 15% of its business members reported they were denied a loan ... (CUNA)

CONSUMER TRAVEL ADVICE

Prepare plastic for trips abroad

Travel can be tricky, particularly when it's overseas. Don't leave home without taking measures to prepare and protect plastic cards--and your ability to use them.
These simple tips could save you hours of frustration and hundreds of dollars or more:

1.  Give card issuer your itinerary. If the company knows you're traveling overseas, it won't place a hold on the card when you try to use it outside the U.S. And if someone uses your credit card number

2.  Call ahead. Contact the hotel before you leave home to make sure your credit card will be accepted there. Some Europeans have adopted chip-and-PIN cards that include a computer chip and require you to enter a personal identification number (thestar.com June 29). If you're carrying a card without this feature, your card might be denied. When shopping, ask a salesperson before you get to the cash register if your card will be accepted. And consider printing your train tickets at home, before departure, to avoid kiosks that require chip-and-PIN cards.

3.  Ask about transaction fees. Some cards assess a foreign transaction fee, which can run around 3% and add up quickly if you charge hotel, restaurant, and other expenses paid for in a different currency. Be aware that even if a transaction involves U.S. dollars, some card issuers assess the fee if you conduct the transaction on foreign soil or with foreign entities. If your card charges a foreign transaction fee, take a little extra cash with you and take precautions to keep the cash safe.

4.  Clean out your wallet. Only take the plastic you'll need, but make sure you have a backup in case your primary card is lost, stolen, or cancelled. And, keep toll-free numbers of your card issuer in a separate place so you immediately can cancel plastic that's been compromised. Keep all plastic in a secure location, such as a wallet tucked into an inside pocket.

5.  Plan for loss. Consider carrying a USB Flash drive with your credit card information and other important documents in digital form. Make sure the flash drive allows for encryption, which protects your confidential information from identity thieves. Then if your card is lost or stolen, simply decrypt the file on a computer

Helping Americans understand more about their money

Check Out mymoney.gov

Cheney tells Senate leaders: Banks wrong on CU biz lending

For the full letter, use the resource link.
http://www.cuna.org/press/press_releases/pk_cuna_070810.html

MARKET NEWS

Initial U.S. claims for unemployment benefits decreased last week by 21,000 to 454,000, the Labor department said Thursday--the largest decline since mid-April and more than analysts anticipated (The Wall Street Journal July 8). Economists had expected a drop of 12,000 claims, according to a survey conducted by Dow Jones Newswires. The claims figures are consonant with other data that indicate improvement in the job market will take more time to develop (Bloomberg.com July 8). U.S. companies hired fewer workers than predicted, according to a Labor Department report last week. "[Last week's figures] point toward a labor market that is slowly moving in the right direction," said Ryan Sweet, a senior economist at Moody's Economy.com (July 8). "We still have a long ways to go and it will be a bumpy road." Meanwhile, continuing claims for unemployment benefits declined by 224,000 to roughly 4.41 million for the week ended June 26, he said

For the second consecutive week, U.S. mortgage rates this week fell to the lowest mark in a half-century. However, the low rates may not be sufficient to spark the housing market (The New York Times July 8). The average 30-year, fixed-rate mortgage dropped to 4.57%--down from the previous record of 4.58% set last week. The rate was the lowest since Freddie Mac began tracking rates in 1971, Freddie said Thursday. Rates fell as investors, worried about the European debt crisis, have shifted their money into the safe haven of Treasury bonds, the Times said ...

The International Monetary Fund's (IMF) most recent assessment of the global economy, released Thursday, predicts the economy will grow faster than expected this year (The New York Times July 8). However, the economic recovery is threatened by major risks and the growth pace likely will slow next year, the IMF added. "While we predict the recovery will continue, it is clear that downside risks have risen sharply," said Olivier Blanchard, IMF chief economist. "How Europe deals with fiscal and financial problems, how advanced countries proceed with fiscal consolidations, and how emerging market countries rebalance their economies, will determine the outcome"
 

FRAUD ALERT
Credit Union National Association is aware of phone calls, text messages, and emails being made about:
• Account Activation, or De-activation
• Confirming Account or Credit Card Numbers
• Account Status Alert
• Changes to Terms and Conditions
• Irregular Activity

The e-mails and text messages ask that the customer call a number in order to have their account reactivated. Some may request that you leave callback information or provide your financial information directly. All of these messages are fraudulent. Please do not respond to these messages.
 

The Credit Union National Association is the trade association for credit unions in the US. CUNA does not maintain any type of customer/member financial information.
Additionally, your financial institution would never solicit your personal identification information via email or telephone. If you did respond to such a solicitation, you should contact your financial institution directly using the local phone number provided by your financial institution

Big improvement for vehicle sales long way off

June’s subpar vehicle sales support NAFCU’s forecast that sales will not improve significantly until the economic recovery gains more momentum toward the end of the year.

Research-firm AutoData Corp. reported last week that total vehicle sales fell from 11.6 million units in May to 11.1 million units in June on an annualized basis. NAFCU Staff Economist Katrin O’Connor said the numbers show that vehicle sales remains in “a zigzag pattern of volatility, but weak overall.”

Breaking June’s data down further, car sales declined from 5.6 million units in May to 5.5 million units in June, annualized; sales of light trucks decreased from 6 million units to 5.6 million units on an annualized basis.

Over the past 12 months, sales were up by 14.4 percent, with all six of the biggest automakers reporting year-over-year June increases. Chrysler reported the strongest year-over-year surge in sales with 35.4 percent, followed by Ford (13.4 percent), General Motors (11.9 percent), Nissan (10.8 percent), Toyota (6.8 percent) and Honda (6.2 percent).

The domestic manufacturers’ share of the total vehicle market declined slightly from 47.6 percent in May to 47.1 percent. At the same time, the import share of sales increased from 23.9 percent to 25.2 percent.

The data confirm that the main weights against vehicle sales continue to be high unemployment, low household wealth, plunging consumer confidence and the continuously tight credit conditions, O’Connor said. “Consumers will likely continue to hold off on buying big-ticket items until they see big improvement in the economy. At that point, we should see a lot of pent-up vehicle demand being released.” (NAFCU)

NAFCU expects private-sector job gains to be slow throughout this year before picking up significantly in 2011, with credit union loan demand remaining below potential over that period.

The Bureau of Labor Statistics reported Friday that non-farm payrolls in June dropped by 125,000. “While the decline in non-farm payrolls was the result of 225,000 temporary employees being released from jobs related to the 2010 Census, private-sector hiring was slightly lower than expected,” noted NAFCU Staff Economist Katrin O’Connor.

Job losses were led by the government sector (-208,000), followed by the construction sector (-22,000), the financial activities sector (-15,000), the information sector (-8,000) and the retail trade sector (-6,600). All the other sectors reported job gains: the professional and business services (46,000), leisure and hospitality (37,000), education and health services (22,000) and transportation and warehousing (14,600). Total private-sector payroll employment increased by 83,000 in June.

Average hourly earnings for all employees fell by 0.1 percent from $22.55 in May to $22.53 in June. Year over year, average hourly earnings were up 1.7 percent.

Meanwhile, the unemployment rate in June declined from 9.7 percent in May to 9.5 percent, according to the Household Survey. “That decline is hardly cause for celebration,” O’Connor said. “It was merely the result of 652,000 persons leaving the workforce during the month.”

Indeed, the bureau’s report confirms that the labor market situation remains dire, the economist said. “There are currently 14.6 million unemployed persons in the labor force, 45.5 percent of which have been out of work for over half a year. In addition, there are currently 1.2 million discouraged workers not counted in the labor force, which will eventually reenter the workforce and put further pressure on the unemployment rate.”

While private-sector job gains will not pick up speed until 2011, the unemployment rate will likely remain elevated for years, the economist added. (NAFCU)

Global CU savings/loans surge,
says WOCCU report

Credit unions in nearly all regions worldwide saw an increase in member savings and loan activity during 2009, according to World Council of Credit Unions' (WOCCU) newly released 2009 Statistical Report.

The trend illustrates the increasingly more important roles that credit unions and other financial cooperatives worldwide played in their members' lives during last year's global recession, said WOCCU.

Total savings for all responding credit unions reached more than $1.1 trillion, the most recorded since WOCCU began the annual survey in 1972. The rate of growth represents nearly a 15% increase compared with the $995 billion in savings reported in 2008. (All amounts are in U.S. dollars.)

Loans were another indicator demonstrating strong growth over the previous year, climbing to nearly $912 billion from $847 billion in 2008. The increase is further accentuated in contrast to a slight decrease in loans globally between 2007 and 2008.

Annual survey respondents from 97 countries reported that 49,330 credit unions served nearly 184 million members.

In recent years, credit unions worldwide have seen notable growth in assets, membership, savings and other indicators. Cumulative assets reached nearly $1.4 trillion in 2009, up from $1.2 trillion in 2008, and reserves reached nearly $120 billion in 2009, up from slightly more than $115 billion in 2008.

Strong financial performance demonstrates members' renewed faith in credit unions' resiliency during difficult economic times, said WOCCU.

WOCCU has collected annual statistics on the international credit union movement for the past 37 years to produce its annual Statistical Report, and data are based solely on the number of countries responding to the survey.

The only source for such comprehensive data on the global credit union movement, WOCCU's Statistical Report is widely cited by governments, international institutions and analysts.

To download a free copy of the report, use this link.  woccu.org/publications

Becker hits ICBA stance on MBL

The Independent Community Bankers of America is being hypocritical in opposing increased member business loan authority for credit unions in connection with a bill that would create a small-business loan fund for banks, NAFCU President Fred Becker said Thursday.

ICBA President Camden Fine wrote Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., to state his group would oppose the small business loan bill benefiting his industry if lawmakers include with it an amendment by Sen. Mark Udall, D-Colo., allowing an MBL cap lift for eligible credit unions.

Hundreds of community and regional banks took funds from the Troubled Assets Relief Fund, Becker noted, and they have yet to increase lending to small businesses. “Credit unions have the capacity to help and are eager to assist our nation’s economy and our small businesses create jobs,” Becker said.

Udall has proposed his amendment, backed by NAFCU, for inclusion in H.R. 5297, the Small Business Lending Fund Act. The bill’s key provisions would establish a $30 billion fund at Treasury to which community banks with less than $10 billion in assets could apply for capital. The hope is that the banks would provide more loans to small businesses.

Fine embraces this proposal but asserts there is “no valid policy reason” for the Udall-proposed MBL cap lift. He says very few credit unions are even approaching the 12.25-percent-of-assets MBL cap and that increased MBL authority would only increase the federal tax “subsidy” to credit unions.

Becker reminded that credit unions are not-for-profit, member-owned institutions that return profits to their members through better and more affordable services, not to select shareholders. (NAFCU)