Archive for the 'credit unions' Category

American 1 and Premier Financial to Merge

 

 

 

NEWS RELEASE

Contact: Kristi Latoszewski

For immediate release VP, Marketing and Communications

April 25, 2011 (517) 787-6510

klatoszewski@a1fcu.org

American 1 Federal Credit Union and Premier Financial Credit Union to Merge

Jackson, MI American 1 Federal Credit Union (American 1) and Premier Financial Credit Union (Premier Financial) have announced plans to merge in 2011; American 1 being the surviving organization. After months of research and negotiation, the Board of Directors for both organizations has approved the merger. The joining of the two credit unions will result in American 1 serving nearly 50,000 Members in the state of Michigan, with assets exceeding $240 million.

“Premier Financial Credit Union has served the financial needs of our membership for 73 years. In this environment, it’s been challenging to maintain the financial position and growth needed to provide the products, services and locations our members want and need. Our partnership with American 1 will allow us to fulfill our mission and provide the added benefits our members deserve,” stated James Safian, Premier Financial’s CEO.

The merger is slated to be legally complete late summer of 2011, when Premier Financial’s nearly 7,000 member’s accounts transition to American 1. Premier Financial currently offers two locations in the Metro Detroit area. Both of these branches will remain open and American 1 has plans to expand the hours of service for the membership.

“American 1 Federal Credit Union was identified as the ideal merger partner because they are committed to providing superior member service. They have a proven history of financial stability and growth and they are committed to giving back to the communities they serve.” Safian said.

“American 1 Federal Credit Union looks forward to serving the members of Premier Financial Credit Union. This merger is a partnership and a new beginning as both of our credit unions move toward uniting our members, services and operations,” said Dave Puckett, American 1’s President and CEO. American 1 Federal Credit Union is a member-owned, not-for-profit financial institution based in Jackson, Michigan. In 2010, American 1 Federal Credit Union had an outstanding return on assets of 1.72%. The notable results placed American 1 in the top 4% of more than 7,000 credit unions in the United States for net income. American 1 Federal Credit Union offers a wide range of consumer banking services with a specialty in auto loan expertise.

Since 1950, American 1 Federal Credit Union serves over 42,000 members in Jackson, Hillsdale, Washtenaw, and Calhoun counties. American 1 is federally insured by the NCUA. More information, including current financial statements, for American 1 can be found at http://www.american1fcu.org.

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NCUA illustrates credit card difference

The National Credit Union Administration’s new site, MyCreditUnion.gov, is a great place to learn more about credit unions – what defines them, how they’re different from other financial institutions (like banks, or savings and loans), how they’re better, etc.

One of the most illustrative points is their section on credit cards. The NCUA shows what a difference a few percentage points on your credit card rate can make on your payments and total payoff amount.

For instance, the time it takes to pay off a credit card with a $5,000 balance at 18% APR is more than 39 years. At 10.9% APR, the time to payoff is only 19 years.

This comes right along with our new credit card comparison booklet, where you’ll notice that a lot of bank and store credit card rates have been hiked to 18% or more. The store cards are especially high – usually in the 20% range.

The NCUA site also mentions credit card pitfalls to avoid, like balance transfer fees (we don’t have those) and annual fees (we don’t have those either).

Don’t change Interchange: the song

I guess it would be nice!

To learn more about how Interchange works, and how it may be affected by proposed regulations from Congress, visit the Electronic Payments Coalition.

Taking our message to Congress

First, thanks to all our members for supporting our Interchange petition drive. We had a lot of members agree with our message in the branches and here on our site, and we appreciate all the support.

Second, we’re taking a broader message to Congress:

[Credit unions are] gathering to advocate for credit union members– to protect them from rising costs, to allow the financial institutions they own build more capital, to help them help the economy recover and grow – and to ensure that their credit unions are around to serve them for a long, long time.

The Hill reports that CUNA’s Governmental Affairs Conference will be a gathering of credit union pros who will take the credit union philosophy – not-for-profit tax status, lower fees, sensible government regulation – to our representatives in Congress.

It should be a heated, active event, especially considering all that’s going on in the financial industry.

Credit unions grow in 2010

Things are looking up for us in the credit union world, according to the Detroit News:

For a second straight year, Michigan credit unions added more than 50,000 members in 2010. That’s nearly three times the 17,000 members added in 2008, then the biggest gain in five years.

Whether it was disgust with high fees, jacked-up interest rates, slashed credit lines or the handing out of billion-dollar bonuses after taking government bailouts, more recession-weary people have decided big banks look too much like Mr. Potter, the greedy banker in Frank Capra’s classic film.

This squares with the reporting from our local MLive.com on businesses turning to credit unions, too.

Not to brag, but we’ve always thought credit unions were a pretty sweet deal.

U.S. doesn’t bailout credit unions; CUs do

Here we go again: just as with two years ago, the Wall Street Journal leads a corporate credit union story with a misleading headline.

In this case, you might get the impression that credit unions are getting bailed out by the federal government, TARP-style. That just isn’t true. What’s really happening is three credit unions who don’t service regular people like you and me (they’re called corporate credit unions) are being helped out by other credit unions.

“Officials said the plan won’t cost taxpayers any money,” the report says. But the headline makes you think otherwise.

Even worse, it’s the number one story in the WSJ’s Most Popular Stories:

This happened a few years back, when U.S. Central Credit Union – a credit union for credit unions – received a loan from the National Credit Union Administration. Essentially, other credit unions stepped in to help the troubled corporate credit union, with no involvement from Congress or TARP or any other bailout institution.

This time, it’s a similar situation: three smaller corporate credit unions are in trouble because of their mortgage investments, which is something we’ve known about and prepared for. So while the WSJ makes it sound like the government is coming in and taking over these corporate credit unions, it’s actually other credit unions and the NCUA that is stepping in to help:

Losses on the mortgage-backed securities held by the five seized credit unions are expected by regulators to total about $15 billion. Wiping out the capital of the failed institutions will cover a chunk of those losses. But the remaining $7 billion to $9.2 billion eventually will be passed along to the nation’s 7,445 federally insured credit unions in the form of future assessments.

In the end, these corporate credit unions are not “retail” credit unions, meaning they don’t help people with auto loans and checking accounts. The corporates serve credit unions like American 1.

Rest assured, this situation isn’t a good thing. But it’s not a government takeover – it’s credit unions helping out their own.

And while these corporate credit unions are facing losses in mortgage investments, the future is still uncertain when it comes to those investments. Who knows – people could pay those mortgages back.

Credit unions, like other financial institutions, are facing a tough time with the mortgage crisis and the economic troubles. But we’re not as bad off as banks are, and we’re not receiving a bailout from the federal government.

We’re taking care of this corporate credit union issue in our own responsible way, despite what the WSJ may lead you to believe.

American 1: Everywhere you are, too

A fun video from Service 1 FCU up in Muskegon. The same principle applies to American 1, and most credit unions.

With services like online banking, online Bill Pay, A1 Access for your phone, and our giant network of no-surcharge ATMs, American 1 is pretty much everywhere you are.

American 1 is strong and secure

Message from the President

As a member of American 1 Federal Credit Union, you expect that your money is kept safe and sound – no matter what. This is a tough economic climate, especially locally, and you have probably read in the news about troubled banks and government bailouts. At American 1, things are different. I want to assure you that American 1 is as strong and secure as ever.

Here are a few reasons you can continue to trust your funds with American 1:

  • Stability – The leadership at American 1 continually makes decisions that provide stability for our credit union members. To ensure a positive bottom line, American 1 steers clear of risky mortgage lending and retains a rainy-day fund for uncontrollable situations. Our financials remain positive, and our financial statements can be seen at any branch or on our website. Feel free to compare them with other banks’ and credit unions’ statements.
  • Lending – American 1 has steered clear of any “credit crunch.” Our members can walk in to any branch and finance an auto loan or open a Visa card. Our stability allows us to lend to members who need it the most – and we have money to lend.
  • NCUA Protection – Your deposits with American 1 are backed by the National Credit Union Administration, an independent agency of the federal government, up to $250,000. Not one member of any credit union has lost a penny of their deposits. Not ever.

American 1 is a local financial institution with a full line of products and services like auto loans, a locally-managed Visa card program, and a large network of no-surcharge ATMs. We are also an active member of our community, providing free, family-friendly events and support to local organizations.

We would appreciate the opportunity to see what else we can help you with. We have money to lend and currently have rates as low as 3.49%*. Be sure to contact us for guidance or questions.

Sincerely,

Dave Puckett
President/CEO

*See our website for details.

American Family Voices: wrong on Interchange

American Family Voices doesn't know quack

We got a funny fax the other day from American Family Voices, a lobby group that’s looking to enact Interchange reforms that could hurt our debit card program.

Here’s the fax. Pretty goofy, right? So goofy that it relies on that ol’ banker trick of trying to paint credit unions as do-gooder banks. AFV is trying to do two things at once: dig up the outdated banker argument, and – at the same time – spin it to fit their Interchange views.

It’s a bunch of quack. Here’s the full text of the fax we got:

If it walks like a bank, talks like a bank, and quacks like a bank… it should be TAXED like a bank.

In 1934, Congress gave not-for-profit credit unions tax-exempt status due to their unique role as lenders of last resort for the poor and underserved.

But today, credit unions comprise a $680 billion industry. This is not your grandfather’s credit union.

So why are these not-for-profit credit unions crying wolf about common sense interchange swipe fee reform?

Credit unions are carrying the water for credit card giants VISA and MasterCard— and the big Wall Street banks that helped cause the financial crisis.

It’s about protecting profits.

Interchange fees cost small businesses and consumers $48 billion every year.

If credit unions want to play with the big boys—and share in their profits—then Congress should tax them like banks.

Today, American Family Voices took out an ad in Politico to tell Congress that credit unions should no longer receive special treatment… and to make sure to pass the Durbin Swipe Fee amendment into law.

We’ve already made our position on Interchange clear, and we can argue about the merits of that all day long. But tying us together with the “big Wall Street banks that helped cause the financial crisis”?

I don’t think so.

Credit unions are tax-exempt because we’re member-owned, we have a volunteer board of directors, and we still serve the underserved. We don’t take the money we make and give it to stockholders or investment groups; we give it back to our members.

AFV claims that “credit unions comprise a $680 billion industry. This is not your grandfather’s credit union.” Well of course not – is growth a bad thing? Credit unions have grown partly due to customers’ disgust with big banks, but our industry is still dwarfed by the for-profit banking industry.

There’s nothing “common sense” about the Interchange reform that lobbyists like AFV are calling for. It’s not going to lower costs for consumers, and it may end up costing them more due to changes in debit card policies if this thing goes through.

Running a debit card program costs money, and Interchange helps credit unions like us pay for the system. You don’t get your electricity for free; you have to pay a power company to deliver that electricity to your home because the delivery costs money. Same with card programs. We hire in-house service employees to help you with your American 1 card questions, and we use Interchange to help pay their salary. And provide security. And provide convenience and a no-annual-fee debit card. Debit card programs don’t run themselves.

Groups like AFV, however, say that we make too much off Interchange fees, and that Interchange fees should only pay for the transmission of the account information. But that’s like paying for just the electrons that cross the power lines. What if a power line goes down? What if a transistor explodes? What if your entire town loses power? Who pays for that?

The only water we’re carrying is for our members. Visa and MasterCard can take care of themselves, and certainly Wall Street big banks can flex their own political muscles. We don’t need or want to help them. American 1 looks out for our members’ needs, first and foremost.

No quacking about it.

Be sure to write or call your local Congressional representative (including Senators Carl Levin and Debbie Stabenow in Michigan, plus local U.S. Representatives Mark Schauer, Gary Peters – who serves on the committee involved – and Mike Rogers) and let them know, as a member, you oppose Sen. Richard Durbin’s Interchange Amendment to the Restoring American Financial Stability Act.

Hey Congress: Don’t change Interchange

[UPDATE: The fight for Interchange has taken a quacky turn. Check out our response to American Family Voices lobbying efforts.]

The Financial Reform Bill is making its way through Congress, and one amendment – the Interchange Amendment – will make it more expensive and more difficult for credit unions like us to have a debit card program. In the end, you will end up paying more.

We highlighting this fight a few months ago, but now the Financial Reform Bill is getting closer to a vote.

What is Interchange? Interchange is the amount that merchants pay to debit card issuers, like American 1, to maintain our debit system. Interchange pays for security, fraud prevention, upkeep on the system, and more. The Interchange Amendment, however, will reduce the amount of Interchange we receive for each debit payment – meaning we could have to start charging our members to have a debit card.

This is bad for everyone. For one, debit issuers like us assume all the risk for debit card programs. Merchants are paid immediately, but American 1 has to worry about processing all that information. Interchange pays for that upkeep.

Two, merchants claim a lower Interchange will save consumers money. But when was the last time a store dropped their prices or saved you money? They’ll charge the same prices and pocket the rest (as they did in Australia), leaving members to pick up the tab. Or demand cash for each transaction.

Three, merchants could decline smaller debit issuers, like American 1, in favor of big issuers like Bank of America. And we all know big banks like BoA don’t have a friendly card program. But our members may have no other choice if their American 1 debit card is denied at big stores like Walmart, Target, and Home Depot.

All this is why we’re calling Congress and telling them to drop the Interchange Amendment to the Financial Reform Bill. American 1 can’t afford to have a great debit card program without a reasonable Interchange income. The amendment takes away that reasonable income.

To help, CUNA has set up a toll-free hotline to help connect you with your representative in Congress:

(877) 223-5275

Simply dial in your ZIP code and the hotline will direct you to your representative. Leave them a strongly-worded message that you would like them to drop the Interchange Amendment in the Financial Reform Bill. If you’re not sure of what to say to your representative (or their voice mailbox), use our handy script and let your voice be heard.

For more information, here are a few articles:


American 1 Federal Credit Union