Guest Author: Jeffry Pilcher of The Financial Brand

We've been following stories about credit unions and TARP in the CU Journal (like the one from earlier this week - click here) for what feels like ages. First, credit unions are in; then, they're out. We're up, we're down - it gets confusing. 

One person who's also confused about the role of credit unions in TARP is Jeffry Pilcher, E-I-C of "The Financial Brand", a very popular blog for finance news, branding and everything in between. In addition to being a successful branding and marketing consultant (His company, IconIQ, can be found here), Pilcher spends countless hours pouring over news sources and tracking what's "hot" when it comes to personal finance. 

He decided to share with us his thoughts on CUs and TARP. 

 

Do natural person credit unions need TARP money or not?

Who really knows? One thing that’s for sure is that the credit union industry’s leadership has not offered a consistent explanation about why credit unions should be included in the TARP bailout. The rationale bounces around with each week that passes. 

Here’s a look at the range of reasons -- some contradictory -- being offered by credit union leaders, in what appears to be a shotgun, try-anything-if-it-might-work strategy: 

"Mortgage Cramdown" - Thumbs Up? or Thumbs Down?

by Ron Daly 

Well it looks like the “Cramdown", a new bill that would allow bankruptcy courts to change the terms of a mortgage on a primary residence, is picking up steam in Congress. It's cleared the House Judiciary and is going to get a vote from the House sometime soon. That vote is expected to pass according to this story from the Credit Union Journal (click here to read).

MarketWatch put out an article explaining some of the finer points of the legislation in depth – the one that caught my eye:

Unknowns include the final language of the legislation, how the risk of bankruptcy cramdowns will affect the pace and degree of loan modifications and what type of increased incentive the new law might provide for borrowers to declare bankruptcy. 

(from MarketWatch - Click here for full article)

If you’re not familiar with the issue, we had a blog post a while back titled “Most Banks and CUs are Against the "Cramdown" (click here to see our story). Both NAFCU and CUNA have come out against the Cramdown legislation. Most recently, CUNA has asked that credit union members across the nation contact their Congressmen and Senators to oppose a provision in the Senate and House stimulus package that would allow bankruptcy courts to change the terms of mortgages. 

On the other side of the aisle, we see the American Bankers Association, the Mortgage Bankers Association and the American Securitization Forum have all issued statements against the same piece of legislation, according to the Washington Post (click for the full story). 

I heard there is a call to action in some of the CU State Leagues and a website for members and CU Professionals to go to? Anyone know what it is? Or care to comment on their position, or what credit unions’ position should be on the legislation?

While you're at it, why not post a comment to the new TownHall Meeting Page, "Under My Administration", too? Click here to tell the folks in charge what they should keep in mind about Credit Unions. 

Don't forget, you can follow The Soapbox through RSS feed OR with our email updates! Get either with our links on the right column of our website.

Guest Author Ben Rogers

Ben Rogers of the Filene Research Institute has plenty of irons in the fire. In addition to raising his kids (a full-time job on its own), he moderates for/contributes to/works with the Filene Institute to find out what's going on with credit unions and the movement at large. Ask the "CU Tomorrow" blog over at Filene, they'll say Ben is their "Driver" - ask us, we'll tell you he's a smart guy who has some interesting things to say about youth and credit unions.

Want to get in touch with Ben? Visit the Filene blogs at http://filene.org/home/blog.

 

Young adults like perks, good managers and the opportunity to innovate at work. What's surprising is the order in which they like them.

 

According to a survey Filene will publish next month, employees younger than 30 value (in descending order): 

6. Cash compensation (3.31) 
5. Credit union values (3.38) 
4. Paid vacation days (3.46) 
3. Attitudes of senior managers (3.58) 
2. Relationships with immediate supervisors (3.6) 

And ... 

1. Support from managers to innovate at work (3.63) 

The numbers on the right indicate the relative scale at which employees valued these things, but I'm amazed not at the content of the list but the order. 

Admittedly the differences in preference are occasionally small, but they're still interesting. Compensation is always going to be a factor in any employment decision, but the survey suggests that, assuming an adequate pay scale, young employees just want to be in a place where they can relate to good people, be managed fairly and have the freedom to champion new ideas. 

So for all you ROA-strapped employers trying to work around wage hikes, consider adding a few free days in lieu of this year's raises. Bonus, though, if you just give both.

If I Were President - a call to voice your opinion.

by Ron Daly 

Since this is Inauguration Day, we figured we'd point some of your usual enthusiasm at Journal EIC Frank Diekmann's new initiative. Read all about it below: 

WASHINGTON – This week a new administration will take over in Washington, with no shortage of challenges or problems to fix. What if you were the new president, or a newly elected member of Congress? What would be some of your proposals and solutions? Credit Union Journal wants to hear from you.

With credit unions headed to Washington for CUNA's GAC just a month after President Obama takes office, the Journal is asking, "How would you fix this mess?" The recession? The war? Bailouts? Cut federal spending? The Journal will feature your administration's approach in the Feb. 23 issue, in conjunction with GAC. Take a couple of moments and share your ideas, whether serious, or just a bit on the satirical side. 

Email fdiekmann @cujournal.com.

Don't feel like firing up your Outlook client to send your ideas to Frank? That's fine - 

Brand New!

CU Soapbox

 Townhall Meeting

Topic: "Under my administration..."

Click here to visit!

Alright, folks - get to work. 

[Editor's Note -- The Comments section of this post is disabled. If you want to remark on the story/submit your notes for the new administration, click the link above to go to the new Townhall Meeting page.]

CU TARP UPDATE: House to vote on HR384; Rep. Frank does not expect Senate vote to happen

by Ron Daly

New stuff off the skillet this morning regarding the vote to allow CUs to take TARP money as capital. 

1) The House of Reps. today will vote on HR384, a piece of legislation that will allow credit unions to count TARP funds as capital. The Senate is not expected to vote on the bill until after the inauguration (From the CU Journal).

2) Rep. Barney Frank, Chairman of the Financial Services Committee, does NOT expect the bill to pass and become law. CUNA is still hopeful that their efforts will be heard/recognized in spite of this and that CUs will, somehow, be able to access TARP funds in the future ( From CUNA News Now). 

I think Chairman Frank's concerns about the fate of the bill come from the fact that, as we reported yesterday, the bill ALSO seeks to redefine the power of Treasury and push money toward helping ease foreclosures.  

More info as we get it. 

Will the TARP cover CUs? Should it?

by Ron Daly

I could sit and write a long, winding blog post about this, but sometimes it's better to give people bricks and let them build the house. 

Let's sum up what we know: 

1) Rep. Joe Baca (D - California) is actively seeking a means for CUs to seek coverage under the TARP plan. (From the CU Journal online). 

2)  Reps. Donald Manzullo (R - Illinois), and Brad Sherman (D - California) pointed out in congressional talks with the House Financial Services Committee that CUs are fairly strong and "have money to lend". Chairman Barney Frank (D - Massachusetts) put forth the measure HR 384. What it would do: 

"The measure, introduced by Committee Chairman Barney Frank, D-Mass., would clarify Treasury’s authority in the program and require that between $40 and $100 billion of the funds go toward foreclosure mitigation. In addition, the measure would make permanent last year’s temporary increase in federal deposit and share insurance increase to $250,000."

   (from NAFCU.org).

Our First Guest Author: Matt Davis, The Credit Union Warrior, talks Skip-A-Pay

Matt Davis (a.k.a, "The Credit Union Warrior") is the Public Relations Director at Members CU. He's also one of the biggest "CU-lebrities" around, thanks to his blog (http://creditunionwarrior.blogspot.com) and ambitious projects like the What Are You Saving For? website (http://www.whatareyousavingfor.com), which is helping to promote a save-minded member by offering prizes for folks who are doing a good job of hanging on to their money. 

Matt's dedication to the credit union ideal and fresh, fun writing style have made him a hit with other cu innovators and regular folks alike. Which is why we at the CU Soapbox were thrilled to have him as our first guest author. So, without further ado...

Members Credit Union’s David to ING’s Goliath: Holiday Skip-A-Pay

 

ING Direct just announced (click here for their press release) that they forgave $861,513 in January mortgage payments for 500 lucky homeowners. For the winners it is hard to imagine a nicer way to start your 2009. For the losers…well, you are just out of luck. 

Enter, $200 million Members Credit Union (Winston-Salem, NC). MCU offered a fee-free "Holiday Skip-a-Pay" to all members for any non-mortgage loan in November or December. The response? 4,089 loan agreements, accounting for $876,772 in member payment obligations, were amended. This accounted for 20.4% of the credit union’s outstanding loans, and an equal ratio of monthly loan payment cash flow. 

MCU launched the program on their CEO’s blog, jackbraswell.com for zero direct marketing cost. Comments such as "Thanks for caring about my family!!!" and "This is a blessing from God" will forever serve as public testimony on the blog. Whether members took MCU up on the offer or not, they will not forget the sentiment: when times are tough, your credit union is here to help. 

What is your credit union doing to outshine the big (in this case HUGE) banks? What can you do to make members’ lives during this trying economic time a little better? How are you making your program accessible for all members?

(Most) Banks and CUs are Against the "Cramdown"

by Ron Daly 

Credit unions and banks are not the same thing. We've all come to realize that. But that doesn't mean that they're entirely different. They offer similar services to people who need to manage their money. Obviously, we're partial to the manner in which CUs offer those services...and the people they offer them to. 

But today, we see the two groups united in their opposition to (standby for new financial buzzword in 3...2...1...)

THE CRAMDOWN.

Yes, the Cramdown. According to this CU Journal article (click here to read), both the NAFCU and CUNA have come out against the Cramdown legislation. On the other side of the aisle, we see the American Bankers Association, the Mortgage Bankers Association and the American Securitization Forum have all issued statements against the same piece of legislation, according to this article from Washington Post (click here to read).

The "Duh of the Week" award for 1/9/08

by Ron Daly

It was brought up on one of our previous comment threads that investigative agencies assign crazy names to robbers/felons to get more press (Thank friend-of-the-blog Jeffry Pilcher for that little tidbit). 

Most of the names match characteristics of the robbers. Example: if the robber is wearing a cowboy hat, he's labeled the "Cowboy Bandit". If he/she is wearing a clown costume, he's obviously going to be the "Clown Bandit". 

Which is why we award the "Duh of the Week" to: 

THE ZOMBIE BANDIT (Read about it here in the CU Journal and here from Fox News). 

Why is this a "Duh of the Week"? Well, he didn't DRESS UP as a zombie. He just looked and acted a lot like a zombie - a byproduct of the crack cocaine addiction that drove his crime spree. 

Here's hoping that the time the robber spends in prison helps him get over his addictions and that his arrest gives the folks at Redwood CU (and elsewhere across the midwest and west coast) a bit of relief. 

Enjoy your "Duh" award, Zombie bandit. Here's hoping you develop a little more "braaaaaiiinnnsss". 

Buy! Buy! Buy! What CUs are up to in the downturn.

by Ron Daly 

If you've been following the Soapbox since the beginning (if you have, thanks, and tell your friends), you'll remember us talking about Warren Buffet's secret success formula: When others are greedy, be fearful; When others are fearful, be greedy. 

As such, CUs (and members) are getting their pick of any number of key programs/purchases. Let's look at some, shall we? 

A Home for You and Me

According to this article (click here) and research findings from SynergisticsResearch.com, more people will be buying homes this year than the market would predict. 

How I come down on this: Good. Why not? Supply is high, demand is low, so cost goes down. There were folks out there who had the means to buy a home back when taking on a crummy mortgage seemed like a good idea, but the financial wherewithal to stay away. Why shouldn't they take advantage of the situation now?