CREDIT UNIONSAND Community Development

Summer 2012

page 3 pages 8 & 12 page 13

Making a difference

credit uniondevelopMent educators

directors'corner

2—network newS

MCUN Board Chair Chris Sisco and Tracie Kenyon

Scott Earl, President/CEO Mountain West Credit

Union Association

UN’s global development network, advocating for change and connecting countries to knowledge, experience and resources to help people build a better life.”

tracie: Sounds really close to what we’re doing in our own communities ...

chriS: Absolutely—providing education, asset building, and crisis prevention all within the structure of a democratically controlled finan-cial cooperative; it’s critical to our members’ and our communities.

tracie: All with the goal of lifting people out of their current financial distress into a better place financially.

chriS: Development work within the credit union movement is so amazing ... it’s hard to call it

“work” isn’t it?

tracie: I couldn’t agree with you more!

tracie: When we start a conversation about development, it can take interesting turns.

chriS: It really can, because so often people confuse development and philanthropy.

tracie: Yes, both are important, but they do serve a different purpose … development really underscores a credit union’s commitment to th e cooperative structure.

chriS: What have you found that inspires ideas supporting development?

tracie: I was recently intrigued by the United Nations Development Programme’s website where I found some fascinating information about develop-ment projects around the world.

chriS: Tell me, what are their areas of focus?

tracie: Surprisingly close to what we focus on in our credit unions: poverty reduction, democratic gover-nance, crisis prevention and recovery, and capacity building are a few of their areas of concentration.

chriS: I looked up the site because I was curious too—this line made an impression on me: “The United Nations Development Programme is the

From My Perspective by Scott earl

Now it’s 2012, 30 years later and I am still work-ing in credit unions. When I started my career, I was sure I would be the head of a Fortune 500 company by now. Turns out, I am doing something so much better.

I just returned from the 30th DE Summer Workshop. While the lodging has changed (no more St. Benny’s), the experience has not. Each new DE comes away having had the same type of experience I did. The overriding lesson is that credit union philosophy is more than just a feel good concept; it drives the suc-cess of the entire movement. Want to drive philoso-phy at your credit union? Send a key staffer through this amazing program.

editorial & reportS

c o v e r s t o r y

Making a Difference Community

Development page 3

MCUCD Philosophy in Action Award

page 4

CUNA: Working for You Through MCUN

page 8

Credit Union Development

Education page 12

Introducing the Directors' Corner

page 13

Low Income Designation

page 14

~ in each issue ~ page

cover Story. . . . . . . . . . . . . . . . 3

philosophy in action. . . . . . .4,5

For Your dues . . . . . . . . . . . . .6,7

league Service Group . . . . . 8, 9

cUsource Update. . . . . . . . . . . 10

kccU Update . . . . . . . . . . . . . 11

directors' corner . . . . . . . . . . 13

Network News Publication Staff

Beth satre Editor and Design/Layout

Photographer

editorial Board Tracie Kenyon, Tabitha Garvin,

Tracy Houck, Circe Gleeson, Donya Parrish, Jeanne Saarinen,

Karen Smith, Ranel Smith, Tracy Thornburg

Like most of you, I love credit unions! I know the movement makes a difference in people’s lives. The not-for-profit model works. Yet, back in 1982, when I was fresh out of college and the new marketing and PR guy at the Utah Credit Union League, I didn’t have a clue. I was lucky enough to have had a boss that knew I needed more. He sent me through the Credit Union Development Education (CUDE or DE) program. It was the very first class of DEs.

Those early DE classes were held at a retreat called Saint Benedict’s in Madison, Wisconsin. It was a former Catholic girls’ school still run by nuns. Pretty stark surroundings and they literally kept us inside the compound for the entire week. It was a total credit union immersion program. I learned about credit union philosophy, the international movement, coop-erative principles, and developed lasting friendships. In short, I came away from this one-week experience a true credit union believer.

–SiSco kid iS a Friend oF Mine–

network newS—3

For those of you who know me, it’ll be no surprise that I was listening to Sirius XM's P.O.T.U.S. (Poli-tics of the United States for the People of the United States) while on my way into work on May 18, 2012 and caught the President’s opening remarks at the Symposium on Global Agriculture and Food Security (which included the quote above). While the topic of ending global hunger was interesting to me, his description of development caused me to pause. I wish that I’d articulated my views on development in such a concise manner ... and maybe I need to give credit to the President’s speech writer (Jon Favreau) or someone on his team ... but politics is not at issue here, embracing development is.

I think it’s safe to say that I fell in love with the credit union movement and our ideals around 1985 (my first credit union job); however, my desire for true development was really piqued when I attended the Credit Union Development Educators (CUDE) program in 1998.

Part of the CUDE designation is a commitment to a development project once the initial training is completed, and my DE project was Montana Credit Unions for Community Development (MCUCD). MCUCD came about as a desire to provide turn-key development programs for Montana’s credit unions—and it has morphed into something much bigger than I had originally envisioned. The Montana credit union system has embraced development with the true understanding that development is not an offshoot of philanthropy; development is providing access and services in combination with education and life-building skills.

In the credit union world, development programs always include financial education: teaching people to become better financial services consumers. Providing life-skills to assist people in managing their financial house is a cornerstone of credit union philosophy; as-sisting them out of poverty is development.

While many development programs may appear to provide a hand-out rather than a hand-up, I believe

that there is often a need for a first boost. Many low-income first-time homebuyers struggle to save enough for a down payment, high school students of modest means find it difficult to save for college, and unemployed workers strain to put food on the table much less save for vocation-al training. Indi-vidual Develop-ment Accounts (IDAs) have provided life-altering results for these situa-tions: people save with a purpose in mind and those saved dollars are matched with grant funds to produce quicker results. With a regular savings program, the sav-er has developed a habit of saving; the matching funds allow the saver to reach their goal of asset achievement.

Free income tax assistance allows low-income tax fil-ers access to assistance with no profit motive thereby allowing the filer to retain any tax refund due them (without the pressure of a rapid anticipation loan). Most money retained by the tax filer is spent in the community where they live—strengthening the entire economy.

Just as the President said in his speech, development is “not only delivering aid, but also promoting eco-nomic growth.” True development meets the trans-actional need of the individual at the time and sets them on the path to self-sufficiency.

“It’s rooted in our conviction that true development involves not only delivering aid, but also promoting economic growth—broad-based, inclusive growth that actually helps nations develop and lifts people out of poverty. The

whole purpose of development is to create the conditions where assistance is no longer needed, where people have the dignity and the pride of being self-sufficient.”

– President Barack Obama, May 18, 2012

Montana boasts six DEs. They are (clockwise from lower right) Tracie Kenyon (MCUN), Heidi Knudson (Altana FCU), Karen Smith (MCUN), Mick Karls (Rocky Mountain CU), Rachael Milne (MCUN), and Jeanne Saarinen (formerly MCUN). Find out more about DE on pages 8 and 12.

cover StorY

MakinG a diFFerence Community Development by McUn president/ceo tracie kenyon, c.U.d.e.

Montana'S credit Union developMent edUcatorS

4—network newS

Sue Smith, President of Ravalli County FCU, takes a moment to pose with Board Chair Chris Sisco (Montana 1st CU), MCUN President/CEO Tracie Kenyon, and her 2012 Philosophy in Action Award

philoSophY in action

This was the sixth year that MCUCD presented its Philosophy in Action Award, recognizing a member

of the Montana credit union family for their work to make a positive difference in their community. This year’s recipient is Ravalli County FCU for the key role that President Sue Smith and her staff played in establishing the Bitterroot Financial Education Coali-tion. Their efforts, said Karen Smtih, then MCUCD Director of Outreach Services, "truly exemplify the cooperative spirit of credit unions."

Financial edUcation iS keY MotivatorSue Smith has long been an advocate for financial education, and the economy in the Bitterroot has suffered setbacks. So, it was not really a surprise that she initiated conversations among friends, co-workers, community partners, and even a couple competitors about her desire to provide financial education to the local community. After several informal conversations at various com-munity meetings, Sue connected with others who acknowledged the community's need and rec-ognized the value of offering workshops to local consumers. Riding the wave of energy build-ing among the budding collaboration, Sue applied for a Small Credit Union Initiative grant from NCUA to help fund financial education workshops.

a coalition iS BornNCUA funded the grant, and Sue’s initiative quickly led to 11 community organizations joining together to form the Bitterroot Financial Education Coalition (Coalition). Officially, the Coalition established itself as “a partnership of Ravalli County organizations working to improve lives and strengthen their com-munity by providing access to financial education.” Active members include the local extension service, RC&D, Head Start, Habitat for Humanity, and DA Davidson, just to name a few.

MakinG a diFFerence in ravalli coUntYWith the NCUA grant, the Coalition was able to of-fer Ravalli County residents three different financial education series in 2011. The first ran for seven weeks and covered a range of topics from managing money, understanding credit, getting ready for retirement, and becoming familiar with local resources. The second series focused on estate planning for young families, and the third was a three-day series dubbed “Show me the Money.”

The synergy of the Coalition continues to grow. Members hold regular monthly meetings, offer ongo-ing local workshops, and take advantage of other opportunities to help Ravalli County residents up their financial literacy quotient. To celebrate Financial Literacy Month this past April, for example, the local radio station ran financial tips provided by Coalition members each day.

keepinG Up the Good workRavalli County FCU’s commitment to the credit union philosophy doesn’t stop with instigating and invigorating the Coalition. Sue Smith became a Certified Credit Union Financial Counselor in Fall 2011, The credit union is also active in free tax services (VITA), offers matched savings accounts, and provides consumer education through an ongoing consumer resource center. The employees of this active credit union are committed to making a positive difference

in their community and the lives of their members.

2011 Mccone county FcU

VITA

2010Missoula FcU

Alternative to Payday Lending

2009park Side FcU & nw Mt human

resourcesFree to Choo$e

2008Midland empire chapter of cUs

You & Your Money

2007Janna Mccormick

Financial Education for SEG Employees

paStrecipientS

2012 McUcd philoSophY in action award Ravalli County FCU Recognized

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the Bitterroot Financial coalition iS on FaceBook. like theM or SUBScriBe to their Feed.

network newS—5

The Montana Credit Union Network started Mon-tana Credit Unions for Community Development in 2003 as a way to encourage credit unions in Mon-tana to get involved in local community develop-ment projects. The initial idea was to develop turnkey programs that credit unions could deploy locally to empower individuals and make a positive difference in their communities.

The nine years since have been, as former MCUCD Executive Director Jeanne Saarinen says with a smile, “a real process.”

While the road involved a steep learning curve and a few detours, MCUCD has evolved into a nationally recognized 501(c)3 non-profit organization that en-joys the support of the entire Montana credit union community and has forged partnerships with other organizations and agencies in the state.

Whether it’s by putting together the requisite part-nerships and the necessary funding to make Indi-vidual Development Account (IDA) programs like Montana Education Savings Accounts (MESA) or Rural Montana Saves available to qualifying residents or building a coalition to bring free tax preparation to communities across the state, MCUCD has arrived at a place where it offers Montana credit unions the tools and skills they need to engage in community development at the local level.

participationSaarinen is also proud of the level of support that MCUCD enjoys. After nine years, the vast majority (over 90%) of the state’s credit unions are involved in one or more of the organization’s programs, and other community organizations are eager to partner with MCUCD and Montana credit unions on projects.

Saarinen notes that this ongoing success brings in-credible benefits —not just to local communities and individuals, but also to the credit unions themselves.

philoSophY in action

201

2 McUcd and Montana credit UnionS Creating Avenues for Community Development

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Jeanne Saarinen oversees action at the very popular MCUCD FUNdraiser at the Creative ... during the Network Annual Convention in April. Saarinen served as MCUCD Executive Director from 2003 through June 2012 when she took over as executive director for the Helena Catholic Diocese Foundation.

“Montana credit unions are considered state leaders in IDAs, VITA, and financial coaching,” she says.

When they offer access to servic-es and life-building skills like this, credit unions are “viewed as a valuable commu-nity resource over and above the financial services they provide,” says Saarinen.

This perception she says helps boost members’ loyalty and membership growth along with community awareness.

BUildinG leaderShipOver the past nine years, Saarinen has noticed that MCUCD’s programs have also played a “role in cultivating the next generation of credit union leaders.”

When credit unions participate in community development, staff, and volunteers have the opportunity to get engaged. Being a VITA volunteer or a Credit Union Financial Counselor or Coach lets one make a positive difference in the lives of people in their communities.

That experience—much like becoming a Credit Union Development Educator (see My Perspective, page 2)—can make staff see that working for a credit union can be more than just working for a financial institution. And that if they engage themselves, they can make sure that “for people not profit” is not just a meaningless motto, but the way that their credit union works.

According to Wikipedia, community development seeks to empower individuals and groups of people by providing them with the skills they need to effect change in their own communities. These skills are often created through

the formation of large social groups working for a common agenda. Community developers must understand both how to work with individuals and how to affect communi-ties' positions within the context of larger social institutions.

6—network newS

credit UnionS: SUper heroS For thoSe in need

For YoUr dUeS

your network staff

tracie kenyonPresident/CEO tracie@mcun.org

kara connorsOffice Manager kara@mcun.org

tabitha garvinCOO, Business Development tabitha@mcun.org

Jami kirkseyProgram Support Coordinatorjami@mcun.org

renee lymanLSG Marketing Coordinator renee@mcun.org

rachael MilneVITA Program Managerrachael@mcun.org

donya parrishVP–Dues Supported Services donya@mcun.org

Beth satreCommunications Manager beth@mcun.org

karen smithExecutive Director, MCUCDkaren@mcun.org

ranel smithEducation Services Director ranel@mcun.org

tracy thornburgDirector of Compliance Services tracy@mcun.org

Q: can my credit union accept non-member deposits?

A:Yes, if your credit is designated as a low in-come credit union (LICU). In fact, one of the

benefits of the LICU designation is being able to accept non-member deposits since non-member de-posits, which are often from other financial institu-tions, can provide a sound source of funding. Some of the ways that LICUs have used such funds include covering costs associated with new member services, funding new loan programs, and adding employees to provide financial counseling for members.

A non-member deposit can, however, have ramifica-tions for a credit union's financial safety and soundness. So—before you get requests— it's best to have the conversation and put together a plan around the following points.

• How will the credit union use the funds made available with the non-member deposits?

• What is the financial impact of the non-member deposit to the credit union’s net worth?

• Are there other or future benefits the credit union will receive because of the relationship with the organization providing the non-member deposit?

• Does the credit union have a liquidity plan to repay the funds?

• Can a net positive return be achieved on the funds?

• Is the income generated on the additional funds greater than the dividend cost paid to have the funds on deposit?

NCUA has numerous resources available to LICUs. Of particular interest may be a supervisory letter (www.mcun.coop/LCU2010-01)—which provides examiners guidance on issues they might face when supervising low income credit unions—and Chap-

ter 23 of the Examin-ers Guide (www.mcun.coop/ExaminerGuide-chapter23).

Not sure if your credit union is a low income credit union? You can

check your Call Report (www.mcun.coop/NCUA-CallReports) or contact us here at the Network.

Ask Compliance

review the list of some of their work, you see that much of it is labor-inten-sive, ongoing, and necessary to pre-serving a strong credit union system.

A few examples of our reliance on CUNA, which• Tracks, monitors, communicates,

and testifies on national level leg-islation with potential impact to credit unions, but also maintain relationship and alliances with lawmakers, consumer groups, other trade associations, leaders in political organizations, and coalitions. You are represented every day on Capitol Hill.

• Provides professional development opportuni-ties with schools, conferences, councils, and certifications.

• Develops training and information resources on compliance topics.

• Advocates for better legislation all the way through the proposed and final stages by soliciting com-ments, input, and feedback on consequences.

• Coordinates initiatives for consumer education, and• Communicates important industry news and

trends via the Credit Union Magazine and the E-Scan video and publications

At the Network, we work hard to be proactive in representing and serving Montana’s credit unions. We firmly believe that a financial cooperative in their own community is a consumer’s best choice of financial institution, so we work to advocate for you and your members. That includes visiting your credit unions, inviting you to education and network op-portunities, helping you be represented positively in the press, building programs through MCUCD that benefit your community, lobbying at the Montana legislature, and collaborating where we can. Part of that work is finding value and we have found tre-mendous value in our relationship with CUNA.

network newS—7

2012 annUal c nvention & expoOn April 18–20, credit union professionals from around the state gathered in Billings for the Network's Annual Convention. In keeping with this year's theme—Credit Unions: Superheroes for Those in Need—these photos show that people had a "super" good time.

league Board

Bernie neibauer

Vice Chair

Jeremy prestaSecretary

tom BoosController

Bob BjellandDirector

Michelle JohnsonDirector

Jim kenyonDirector

kathy sheaDirector

Because of the upcoming merger between Montana 1st CU and Spokane-based

Horizon CU, the League Board will appoint a

new chair at their Septmber meeting

For YoUr dUeS

photoS, CLOCkwISE FrOM BOTTOM LEFT: The Kansas Corporate Credit Union contingency—Steve Howke, Larry Eisenhauer, Walter Thompson, and Tonya Johnston—hit the Exposition in full superhero regalia. 1 Al Vukasin (Bear Paw CU) and Tracy DuFresne (Altana FCU) at the live aution Thursday night showcasing two paintings from the Non-Golf FUNdraiser. 1 Conference Speaker Lee Silber creates an atmosphere of fun and interaction during his session. 1 NCUA Region V Director Liz Whitehead speaks at the Annual Business Meeting. 1 Particpants in the Non-Golf FUNdraiser concentrate on painting at the Creative Canvas in Billings. Their group creations were auctioned off to raise additional funds for MCUCD. 1 Thursday morning, conference-goers watched

They say a picture is worth a thousand words. The “picture” inserted with this issue of how your CUNA membership worked for you in 2011 qualifies as priceless.

As your state level trade association, the Montana Credit Union Network works hard on behalf of your credit union, staff, volunteers, and members. But we don’t do it alone. Your affiliation with the Network requires affiliation with the Credit Union National Association.

Our relationship with CUNA, the national level trade association, allows us to concentrate on the specific needs of Montana credit unions. CUNA provides support to the credit union industry as a whole and supports you in many ways. Their prod-ucts, advocacy, knowledge, and timeless efforts could never be replicated by local staff unless your finan-cial resources for dues were unlimited.

They are not, and we know that the value of your af-filiation needs to be meaningful as well as economi-cal. Much of the work in building relationships that both CUNA and MCUN do is intangible. If you

CUNA Working for You Through MCUN

CUNA delivered 78 comment letters to 17 federal agencies (NCUA, Dept. of Treasury, CFPB, Federal Reserve

Board, FinCEN, IRS, Small Business Administration, DOJ, FHFA, FTC, FASB, NACHA, Obama Administration, OGE, OMB, SEC,

and AFTC), recommending improvement to their rules and regulations with a focus sharply on reducing regulatory burden.

There are more than federal rules/laws affecting credit unions; therefore, CUNA and the State Leagues pro-actively

monitored more than 1,500 bills in state legislatures, across all 50 states, that could impact credit unions

and the way they do business.Culminating in 2011, CUNA’s grassroots debit interchange campaign delivered more than 2 million calls, emails

and letters resulting in an improved Fed rule and commitments from key members of Congress to respond if the

two-tier system fails to work as intended. Nearly 160,000 credit union media mentions and pro-credit union stories were featured by leading media out-

lets including The Wall Street Journal, The New York Times, ABC World News, CNN, NPR, Reuters and Fox Business Network,

along with all three network broadcast morning shows Good Morning America, Today, CBS This Morning and many more,

exposing millions of additional consumers to the credit union difference and helping to drive extraordinary member growth.

CUNA and League compliance resources remain unparalleled. CUNA’s members-only compliance webpage averages

1.5 hits per credit union per day, which includes CUNA’s CompBlog and CUNA’s e-Guide to Federal Laws and

Regulations.

CUNA was credit unions’ first choice for compliance training including 293 compliance webinars, 8 compliance

schools and 116 other compliance training resources.

CUNA awarded more than 33,000 certificates and designations, including: 4000+ Volunteer Achievers, Certified

Volunteers and Volunteer Leaders; 1,014 Compliance professionals and Certified CU Compliance Executives; 800 Board

Financial Literacy Certificates; 441 Certified CU Financial Counselors; and 231 Certified Credit Union Executives.

CUNA remained one of the most bipartisan organizations in Washington with 50.3% of CULAC contributions to

Republicans and 49.7% to Democrats taking partisanship out of the equation and simply focusing on support for

credit union friendly candidates. More than 193,000 people made more than 240,000 visits to aSmarterchoice.org and 62% of these

navigated successfully to the website by clicking on a link at a “referring site,” typically a news outlet’s website such as

The Wall Street Journal or Time Magazine.Nearly 4,800 executives have participated in CUNA Management School, which is in its 58th year,

ensuring the growing number of leaders who are instilled with credit union philosophy and cooperative principles.

As a membership organization, CUNA with its network of 44 state and regional

leagues/associations counted more than 6,100 of America’s credit unions as

members. In 2011, your “Membership @ Work” achieved the following milestones…

a taping of the Home & Family Finance radio show. Host Paul Berry shares a laugh with Denise Armstrong (Big Sky Senior Services) and Tracie Kenyon (MCUN) during a combined Q&A after their interviews. 1 Melanie Hall, Montana Commissioner of Banking and Other Financial Institutions, smiles during her comments at the Annual Business Meeting. 1 Mickey Kunnary (CUsource) welcomes the crowd and gets ready to send the golfers out on the course at the beginning of the CUsource Classic on Wednesday morning. 1

8—network newS

LSG BuSineSS PartnerS

CO-OP Financial Services

CUAdvantage

CU Auditing

CU Recovery

CU Succeed

CUNA Mutual Group

Digital Compliance

Empire Office Machines

FIS/CSCU *Harland Clarke*ICUL Service Corporation

Invest in America*John M. Floyd & Associates

Mountain West Benefits

Cuna StrateGiC ServiCeS (CSS)

3SI Security Systems

Accel

Agility Recovery

American Background

CU Calendars

Diebold

Fynanz

Informa Research Services

ID Analytics

Intuit Financial Services

MoneyGram

Ongoing Operations

Panini USA

Passageways

Perimeter

Switch SuperNAP

TraceSecurity

Verafin

*business partners of both LSG and CSS

Thirty years ago President Ronald Reagan sought to leverage America’s resources to build a better world and a successful bi-partisan effort headed by then Senators Claiborne Pell (Republican from Rhode Island) and Joe Biden (Democrat from Delaware) amended the Foreign Aid Bill to make foreign aid available to support initiatives in the U.S. related to hunger and economic development in developing countries. The U.S. government saw such initiatives as a tool for peace.

The U.S. Agency for International Development (USAID), which administered the government’s development education outreach and distributed an average of $2.7 million a year, ended up accept-ing and partially funding 88 programs during the program’s 12 year tenure. Launched in 1982, the Credit Union Development Education (CUDE) Program is the only one of those 88 programs still in existence today.

A key reason for the program's continued survival is the strong support it receives from the credit union community. Along with the National Cred-

it Union Foundation, the World Council of Credit Unions and CUNA, CUNA Mutual has provided critical support for the program from its inception.

“It fit right in,” explains Larry Blanchard, who re-tired in 2008 as SVP of Corporate and Legislative Affairs for CUNA Mutual Group and is currently a senior consultant for the company.

Started by credit unions, CUNA Mutual is steeped in the belief that everyone deserves access to cred-it—a tenet that dovetails nicely with a key phi-losophy of development education that the poor, oppressed, and marginalized deserve to be empow-ered and to choose their own path of development.

In fact, USAID recognized credit unions them-selves as tools for development because they are people-owned democratic institutions that have cooperative operating principles, allow individuals to pool their resources for common benefits, and are not governmentally controlled.

While the credit union community often focuses on its international development work, CUNA Mutual continues to find the CUDE program invaluable for their company and staff here in the United States.

“Teaching credit union philosophy is the right thing to do,” says Blanchard. “We’d be just a bad imitation if we don’t know who we are and where we came from.”

Blanchard, who went through one of the first CUDE classes, explains how pivitol the program was for him. "When I went into the DE pro-gram, I'd been in credit unions for over 25 years. I learned more about how the pieces fit together in those six days, than I had in all the years before," he says.

Blanchard also credits DE as a source of moti-vation for the The Credit Union Campaign for Consumer Choice in the 1990s. "DE provided the bigger picture and our objective," he notes. "We were working to make credit unions accessible to all people."

CUNA Mutual and CUDE, cont. on page 14

cUna MUtUal GroUp Supporting Credit Union Development Education

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“…to coMMUnicate and proMote the UniqUe role oF credit UnionS in cooperative developMent and to aSSiSt in oBtaininG SUpport For credit Union proGraMS worldwide…. to help credit Union people in the U.S. to FocUS on the UniqUeneSS and philoSophY oF credit UnionS and to UnderStand theM aS cooperative toolS For iMprovinG people’S liveS.”

cUde pUrpoSe StateMent

network newS—9

Adding or reviewing ServiceS?

for quAlity buSineSS

SolutionS for your

credit union call

Tabitha Garvin 800.745.5546 ext 132 tabitha@mcun.org

LSG ServiceS

Smart MOVES • Volunteer Training • Strategic Planning • Succession Planning • EZ Finance Reports • Board Retreats

Distance Learning

Network Compliance Service

NADA

CUNA Mutual and CUDE, cont. on page 14

scholarship funds. “I am selling our Smart MOVES onsite board trainings and our distance learning program, but I’m also letting the credit unions know that when they support LSG, they are making edu-cation scholarships possible. I think our scholarship program is a key member benefit that I hope all our smaller credit unions make use of.”

Scholarship details and application can be found on our website at www.mcun.coop/Scholarships.

The League has provided scholarships to smaller cred-it unions to support on-going education. Scholarships were originally funded by the Montana Credit Unon Foundation. When Montana Credit Unions for Community Development was formed, the scholar-ship funds were then distributed by MCUCD.

In 2011, the Foundation scholarship funds expired and a new funding source was needed. The Net-work board unanimously approved League Service Group becoming the sole sponsor of the Education Scholarships. The board also expanded the scholar-ship eligibility to credit unions under $20 million in assets, previously only credit unions under $10 mil-lion were eligible.

Since the expansion, several new credit unions have been awarded scholarships which pay one half the registration fees for conferences or distance learning options as well as travel expenses. Tabitha Garvin, COO-Business Development eagerly shares with our smaller credit unions about the availability of these

co-op SUpportS the credit Union Social MiSSionCO-OP Financial Services has been an integral part of the Credit Unions for Kids program since the late ‘90s when they introduced the ATM cam-paign and raised almost $200,000 in year one.

Since that time, CO-OP has stepped up to spon-sor Champions Across America and countless other programs and events that support Children’s Miracle Network Hospitals. In 2008, CO-OP started the hugely popular Miracle Match pro-gram, which provides $1 million in matching funds each year to credit unions conducting fun-draising campaigns and events under the Credit Unions for Kids banner.

Miracle MatchMiracle Match is open to all credit unions, chap-ters, and leagues in the United States. Preference is given to credit unions that are members of CO-OP and to chapters and leagues that have one or more CO-OP member credit unions. To apply for the Miracle Match program

• Submit your application to CO-OP before the date of your event and no later than September 30.

• Submit your application as early as possible to ensure there are enough funds available to match your event.

Because funds are limited, sending in an application is not a guarantee of a match. Accepted organiza-tions will be notified in late January, May, August, and October.

In addition to the over $2 million contributed annu-ally, CO-OP employees volunteer countless hours on event committees and both local and national Chil-dren’s Miracle Network Hospital boards.

Serving the credit union community for over 30 years, CO-OP is the industry leader in access and convenience products. With a total of 3,000 credit unions, 30 million cardholders, 28,000 surcharge-free ATMs, 4,000 shared branch locations and 160 million-plus monthly transactions, CO-OP is the nation’s largest credit union service organization.

total scholarships distriButed May 2011–May 2012

diStance learninG ScholarShipS $2,103.00

SMart MoveS $912.00

conFerence ScholarShipS $3,971.50

travel ScholarShipS $281.66

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LSG Supports Scholarships for Credit Unions

10—network newS

CUsource, LLCCorporate Office

501 Park Drive S, Ste 400PO Box 3329

Great Falls, MT 59403

Great Falls and Helena 800.823.2876

Billings: 800.528.6668

www.cusource.com

cusource Management teamshirley BaileyPresident / CEO shirleyb@cusource.com

Megan davisonChief Financial Officermegand@cusource.com

Mark MaulerProgramer/Engineermarkm@cusource.com

Brandi holefelder Software & Technical Services Managerbrandih@cusource.com

kelly calnanDraft Services Managerkellyc@cusource.com

Mickey kunnaryPrint/Mail & Security Services Managermickeyk@cusource.com

tracy houckMarketing & Business Dev. Manager tracyh@cusource.com

chandra thronson real Estate Managerchandrat@cusource.com

Mickey Kunnary, Chandra Thronson and Tracy Houck smile

for the camera during the CUsource Classic 2011.

CUsource believes so much in the work that MCUCD does that you will often hear our staff pro-moting their good work. We also have put our money where our mouth is by helping MCUCD raise over

$48,000 in the last nine years.

We started out with golf and over-all we have held nine tournaments — first as the UniPro Open and now as the CUsource Clas-sic. With our vendors con-

tributing to the prize pool and CUsource paying for the green fees, 100% of the reg-

CUsource and MCUCD: Fundraising Champions istration fees go directly to MCUCD. Because of the late winter-early spring timing of the annual tourna-ment, however, we don't always get to golf! Over the years, we have bowled, competed in a scavenger hunt, and played the good old-fashioned bar games pool and darts. When we do get to golf, we have been known to play in weather from 40 to 75 degrees (and everything in between).

Through it all, our tournament is a fun event that gives our participants a chance to network with new business partners and reconnect with their peers.

In addition to the CUsource Classic, CUsource has hosted other fundraisers for MCUCD at our annual Client Conference in September. Our most successful venture so far has been the Dueling Pianos Anywhere performance in 2011. The crowd loved it, and we raised around $5,000 in just a few hours!

Fundraising for this great cause is contagious. Credit unions have also been stepping up and have coordinated non-golf fun-draisers at the last two annual meetings for those who want to have fun and support MCUCD but don't golf. Thus far, Mon-tana 1st CU organized a wine tasting in 2011 and Altana FCU an art day in 2012. Both events were wildly successful and to-gether raised $10,000. We only look for these events to get big-ger and better as time goes on, giving everyone who attends the MCUN Annual Convention a chance to participate in some-thing enjoyable while contribut-ing to MCUCD.

CUsource remains committed to help raise funds to main-tain and extend the reach of MCUCD's programs. We look forward to our 10th golf tourna-ment next year, as well as the many other opportunities we have to help.

Those in our business can re-cite the wikipedia definition of a credit union "as a member-owned financial cooperative, democrati-cally controlled by its members, and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its mem-bers." The debate is not about the definition; rather, it's about how a credit union delivers on the defini-tion for their members.

Does your credit union offer credit? Do you offer credit at a competi-tive rate? What type of credit? Most credit unions are known for their low rates on auto loans. But what about real estate loans? Does your credit union offer them? Are you positioned to be competitive in your marketplace? And, lastly and maybe most importantly, do your members know you offer them?

First mortgage lending is vital to credit unions and their members. Yet, quite honestly, many credit unions don't offer real estate lend-ing because they are not certain they can staff appropriately to offer a variety of the conventional mortgage options, such as 30- and 15-year fixed-rate mortgages, ARMs (adjustable rate mortgages) of vary-ing lengths, home equity loans, and government backed programs like FHA and VA home loans.

CUsource's real estate department eliminates that burden. Our staff are knowledgeable and available to process and support real estate loans. CUsource is also SAFE Act compliant having passed both national and state testing require-ments. For more information, please call CUsource Real Estate Manager Chandra Thronson at 800-528-6668.

real eState loanS For YoUr MeMBerS

network newS—11

Kansas Corporate Credit UnionCorporate Office8615 W Frazier

Wichita, Kansas 67212

Montana Office101 N Rodney

Helena, Montana 59601

800.721.2677 www.kansascorporate.org

CUsource and MCUCD: Fundraising Champions Kansas Corporate Credit Union (KCCU) was char-tered in 1951, and, from that date to 1994, KCCU had NO deposit insurance. It was deemed unnecessary as it would have covered such a limited amount of credit union deposits. KCCU acquired federal deposit insurance when NCUA changed Regulation 703, which required credit unions to make investments in financial institutions that were federally insured. KCCU is now regulated and examined annually by both the KDCU and the NCUA Office of Corporate Credit Unions.

NCUA put the current Temporary Corporate Credit Union Share Guarantee (TCCUSG) in place in Feb-ruary 2009 to eliminate uncertainty about the safety of deposits in corporate credit unions during the financial crisis. It was meant to be temporary and has come at a tremendously steep cost to federally insured credit unions. Eliminating the guarantee should help reduce future assessment amounts for the Corporate Stabilization Fund. The new regulations increas-ing capital requirements, implementing minimum income standards, and disallowing investments in private label mortgage-backed securities make corpo-rate credit unions safer institutions than ever before. The corporate credit union system has stabilized since 2009 and, as such, it is time the guarantee expires.

It seems outside the realm of normalcy for regulators to expect that credit unions won’t have uninsured de-posits, as they did before when there was no deposit insurance or before the TCCUSG was issued. Dare I say, we, as an industry, are returning to normal (knock on wood). But if we are, that means credit union balances in their corporate credit union will once again exceed the share insurance limits—just as they had prior to the TCCUSG.

The broader question, however, is how to best com-municate your comfort level with doing so to the regulatory agencies. The answer: Due diligence, plain and simple. Kansas Corporate posts our Monthly Membership and Financial reports on our website. Download and share them with your volunteers and examiner. These reports contain

• A comparison of our monthly net income to our budget, current liquidity status, and monthly Bal-ance Sheet & Income Statement

• Month-end capital ratios (We meet all regula-tory requirements and fall within the “Well Capitalized”category.)

• Current Net Economic Value analysis and percent-age change in the +300 rate shock scenario, which measures the interest rate risk KCCU has assumed. (We meet all regulatory ALM requirements.)

• Monthly board meeting summaries and quarterly comparisons of KCCU's actual and budgeted finan-cial performance

Other available resources include our Annual Report and Financial Audit.

If you feel compelled to reallocate your balances at KCCU, we encourage you to use our off-balance sheet products SimpliCD and marketable securities. Call an AIM representative at 800-721-2677 to dis-cuss your options.

All of the aforementioned due diligence documents are available at www.kansascorporate.org, under the Communications header on the Financials & Newsletter pages. If you need help locating them, contact Circe Gleeson, Marketing Manager (800.721.2677 Ext. 106; circeg@kansascorporate.org).

Share inSUrance depoSitThat Was Then, This is Now by kccU president/ceo larry eisenhauer

201

2

The KCCU board has always been represen-tative of our membership, and—with new credit union members in Montana—it was time to expand our board seats from seven to nine and get some new blood on the KCCU volunteer roster.

That’s where Kevin comes in! Kevin Mayer, President/CEO of Richland FCU, has been appointed to the Kansas Corporate Board of Directors. “Kevin’s vast knowledge of Mon-tana credit unions coupled with his understanding of corporate credit unions make him a great candidate to represent our new credit union members, and we welcome his input and candor as we work to ensure our Montana credit unions are served in the best manner possible,” states Larry Eisenhauer, KCCU President/CEO.

“We’re very pleased to have him on board and on the board.”

kccU Board expandS BY two and addS MaYer

Kevin Mayer

corporate credit union

12—network newS

Development Education by lois kitsch, real Solutions program director

credit Union developMent edUcatorS

I have been asked a hundred times what is in the “secret sauce” that makes DE a transformational

experience for so many credit union professionals. The answer is as varied as the people who attend the six-day emersion program now held twice each year in Madison, WI. Currently celebrating its

30th anniversary, the DE Program remains true to its mission of promoting credit unions’ unique-

ness and social responsibility though inter-active adult education and peer learning.

In 1982, the CUNA Foundation, now known as the National Credit Union Foundation, received a grant from the United State Agency for International Development (USAID) to initiate the DE Program. The program's early focus was to understand global development issues that

related to building financial stability and security for families in developing countries. Sixteen develop-ment issue—like hunger, adequate housing, health, appropriate technology, and women in develop-ment— were identified and incorporated into the training.

My DE experience began in 1986 when I was a drive-up teller for a small credit union in a very rural community. At that time, the development issues

seemed far removed from my work in the credit union. However as my DE training week wore on (and in the many years since), I have come to recog-nize that credit unions are development organizations that have the capacity to truly change the lives of the members they serve.

It may sound corny to say DE changed my life—but it did. During my DE training I had the opportunity to talk a young man from Zambia, a butterfly-shaped country in Africa. He told many stories of his work with members and, over the hours we spent together, he awakened a desire in me to make a difference in developing economies. I promised that I would one day visit his country to work with him and his credit unions. Well, I've not yet made it to Zambia, but I did make it to Senegal, Kenya, the Philippines, Afghanistan, Ecuador, and many other countries to carry out my personal DE mission—to bring finan-cial services to those that need them the most. My story can be replicated hundreds of times, as all DEs brings back their own mission to their community, their country, and their credit union. Today, there are DE programs in seven different countries or regions: Australia, the Philippines, Asia, the Caribbean, the United Kingdom, Europe, and the US.

While the DE program continues to delve into development issues that affect developing econo-mies, the primary focus of today’s DE Program is to understand local development issues and how these issues affect our members and their com-munities. Through facilitated discussion, group case studies, and problem solving, the DE trainees focus on societal development issues, credit unions’ social mission and the international credit union operating principles. Motivated, with a renewed sense of purpose and commitment to credit unions, DEs return home with a newly minted passion and desire to serve others and help them achieve their financial dreams. For DE is not about the program—it is about what people take away from the experience and how they use what they have learned to make a difference in those things that are within their immediate control.

Lois Kitsch is the REAL Solutions Program Director at the National Credit Union Foundation. To learn more about the DE program, visit www.ncuf.coop National Programs or contact Lois Kitsch at lkitsch@ncuf.coop.

“it may sound corny to say de changed my life—but it did.”

—lois kitsch

Fall 2012Sept. 6-13, 2012Madison, WISOLD OUT!

SprinG 2013May 1-8, 2013Madison, WI

Fall 2013Sept. 2013 (dates TBA)Madison, WI

Consider becoming a Credit Union Development Educator or encouraging an employee at your credit union to attend. DE Training is held in Madi-son, WI, in the spring and fall. Below are the upcoming dates. The size of the classes are limited, and they fill up quickly, so don't hesitate. There are scholarships available.

If you have questions about the training or becoming a CUDE, contact one of Montana's CUDEs (page 3). You can learn more about the program, register, and download the scholarship application at www.ncuf.coop.

network newS—13

Directors' Corner

directorS’ corner

Montana credit unions honored Richland Federal Credit Union (RFCU) Board Member Gary Schoepp by naming him Montana’s Credit Union Volunteer of the Year for 2012. This award recognizes Schoepp’s 25 years of unswerving commitment and countless contributions to both RFCU and the Sidney community.

Mitch reed volUnteer oF the Year

2012 naFcU volUnteer oF the Year

One of the key differences between credit unions and for-profit financial service providers is our cooperative structure. Credit unions are member-owned and governed by a board of volunteer directors who are elected demo-cratically from (and by) the membership. Volunteers play a huge role in our industry and take on a lot of responsibil-ity when they accept a seat on their credit union's board.

Setting policies and the direction of a financial institution in this day and age is not a task to be taken lightly. To call at-tention to the work that Montana's credit union volunteers do and to help them in that work, we are adding a "Directors' Corner" page to Network News. Here we will cover issues important to directors and recognize their achievements.

“Gary is the true definition of a vol-unteer,” said RFCU Manager Kevin Mayer, who was instrumental in nominating Schoepp for this presti-gious award. “We are thankful and fortunate to have him volunteering his time on the RFCU board for the

past 25 years."

As a RFCU board member, Schoepp donates his time and expertise. For the past 25 years, he has provided leadership to the credit union in good and not-so-good economic times. He hasn’t been afraid to tackle tough issues or to help his credit union expand to better serve its members. And, he has done so with skill and grace.

In addition to his tremendous service to his credit union, Schoepp is active in the Sidney community—serving in leadership roles at the local Chamber of Commerce, Kiwanis Club, the Richland Economic Development Corporation, and on the Sidney School Board. This has given him a deep understanding of and appreciation for the ways in which Richland FCU plays an important role in the local community.

As a result, he takes his responsibilities on the credit union board very seriously. As Schoepp once explained to Senator Max Baucus, “When I see RFCU members in the grocery store, I have to be able to look them in the eye and account for my actions as a credit union board member.”

“Gary’s integrity, honesty, and commitment are priceless,” said Tracie Kenyon, President/CEO of the Montana Credit Union Network. “It’s not just RFCU that has benefitted—so have RFCU members, the Sidney community, and all of Montana’s credit unions.”

NAFCU Volunteer of the Year Carl Rummel talks to Montana credit union volunteers during his workshop Motivating Volunteers and bringing FUN to the Boardroom at the Network's Annual Conference in April.

Richland FCU Board Member Gary Schoepp takes the podium with MCUN President/CEO Tracie Kenyon after being named the 2012 Mitch Reed Volunteer of the Year.

The National Assocation of Federal Credit Unions named Carl Rummel, Missoula FCU Board Chair, the 2012 Volunteer of the Year for credit unions with $150 million or more in assets.

This award is well-deserved. Missoula FCU counts Rummel as one of the most dedicated and motiva-tional leaders the credit union has ever had. He leads by example, and his tenure as board chair has led to an environment of teamwork between board, senior management, and staff. He has even structured board meetings so that volunteers and staff actually enjoy the process and manage to get their work done in a short timeframe.

14—network newS

the advantaGeS oF licU deSiGnationAccording to mycreditunion.gov—NCUA's website for consumers—credit unions with a low-income designation "gain access to both additional sources of funding and additional resources. Some of those additional sources of funding include

• Accepting non-memer deposits

• Offering secondary capital accounts

• Qualifying for exceptions from the current 12.25% statutory cap on member business lending

• Participating in the Community Development Revolving Loan Program, which provide loans and grants for technical assistance.

cuna mutual and cude continued from page 8

As the program celebrates its 30th birthday, it has branched out, with CUDE programs in Australia, the Asia Confederation, the Philippines, the Unit-ed Kingdom, and the Carribean with programs in develoment in both Poland and Africa. In the U.S, about 1,392 people have graduated from the program. Since each graduate commits to personal outreach to educate others about development issues and the role that credit unions play as a development tool, the actual impact of the program is much larger. If each graduate has told just 500 people about the unique-ness of credit unions and the importance of commu-nity development, they have reached 696,000 people. If that number is bumped up to 1,000, than 1.3 mil-lion people have heard the message.

Low Income Designated Credit Unions

For YoUr dUeS

Credit unons provide valuable access to financial services for people who are underserved or unserved

by "traditional" financial in-stitutions. In 1970, the Federal Credit Union Act was amended to authorize the NCUA Board to define "low-income members" and to accord certain statutory benefits to credit unions that were serving them.

In June 2012, CUNA News Now reported that during a speech before the National Fed-eration of Community Devel-opment Credit Unions' annual conference, NCUA Chairman Debbie Matz called Low-income credit unions (LICUs)

"national trendsetters that are leading other lenders in loan growth while simulataneously strenghthening their safety and soundness."

what iS a licUA low-income credit union is one in which a simple majority of its members qualify as low-income

members who earn 80% less than the median fam-ily income for the metropolitan area they live in or the national metropolitan area, whichever is greater. In rural areas, a state non-metropolitan standard applies. Credit unions that request—and qualify for—the LICU designation can avail themselves of additional sources of funding and resources (see the box on the left).

The majority of credit unions in Montana are al-ready designated LICUs or could qualify for the designation.

licUs doinG Good workMatz said that LICUs, which serve an estimated 6.6 million Americans, had actually expanded their loans by $11 billion—or almost 58%—between December 2007 and March 2012. During that same time period, loans made by banks and thrifts had declined overall by about 6.3%.

Marz also reported that many of the key financial indicators for LICUs have also recently improved, leading her to say that their collective sucess "dem-onstrates that crdit unions can do well while serving people of modest means."

LICUs are making this kind of progress even though they can often face unique challenges serving their membership well. Some of those challenges can in-

clude a disproportionate amount of low share account balances; the need for small dollar loans; an increased need for more labor-inten-sive services like check cashing, money orders, financial education, coaching, or counseling; and members who have limited, negative, or no credit hisotry along with limited financial resources.

Small credit unions can find it the most difficult to accomodate these challenges.

"the collective SUcceSS oF low-incoMe credit UnionS deMonStrateS that credit UnionS can do well while ServinG people oF ModeSt MeanS."

—deBBie Matz, ncUa Board chair

network newS—15

recoGnition

They say a picture is worth a thousand words. The “picture” inserted with this issue of how your CUNA membership worked for you in 2011 quali-fies as priceless.

As your state level trade association, the Montana Credit Union Network works hard on behalf of

Al Vukasin, President/CEO of Bear Paw CU, is the Montana Credit Professional of the Year for 2012. This award recognizes Vukasin's contributions to credit unions and represents the great respect of his peers.

Vukasin cares deeply for the credit union movement and his leadership has made a huge difference not only at his credit union, but at the state and national levels. He takes credit unions seriously, but can also be counted on to lighten the mood in any meeting. A combination that is rare and much appreciated.

Vukasin has proven himselve a sound and compas-sionate leader who is creative and resourceful. In his 19 year tenure at Bear Paw, he has created a strong, via-ble, and impressive institution from a struggling credit union under an NCUA Letter of Understanding.

Under Vulasin’s leadership, Bear Paw CU has been extremely active in the Havre community giving back whenever possible. The credit union has established an outreach program to provide financial services to the residents of Fort Belknap Indian Reservation, hosts VITA sites to help low-income tax flers, offers indvi-didual development accounts, and sponsors numerous community events along the Hi-Line.

At the state level, Vukasin served on the Network board for 12 years, including a two-year term as Chairman. He was one of five Montana credit union CEOs to start the Health Benefits Trust and served as

2012 Professional of the Year

network receiveS nUMeroUS recoGnitionS

trustee for four years. He has also represented Mon-tana on the national level, serving as CULAC trustee for five years and as a member of the CULAC execu-tive committee for three more. He also has traveled regularly to Washington, D.C. for visits with Mon-tana's Congressional Delegation in conjunction with Hike the Hill and the GAC.

Over the years Al Vukasin has contributed much to the credit union movement, and is very deserving of this special honor.

Montana Credit Union Professional of the Year Al Vukasin poses with Network President/CEO Tracie Kenyon and Board Chair Chris Sisco.

The Network's two "Diamond Awards"

wally BerryMontana FcU

Bob BjellandFergus FcU

Gene Bowenhelena community cU

(now retired)

Gary clarkMissoula FcU

rhonda diefenderferaltana FcU

Steve kingMontana FcU

chris SiscoMontana 1st cU

clint van attaBillings FcU

(now deceased)

PREVIOUS MONTANA CU

PROFESSIONALSOF THE YEAR

•

101 N. Rodney • Helena, MT 59601

Montana credit union

network101 N. Rodney

Helena, MT 59601

phone406.442.9081800.745.5546

websitewww.mcun.coop

to reach network staffThe Network has updated its phone system, and all staff members now have a direct telephone line. Our old extensions still work, but If you want or need to talk with one of us, please call us at our number below.

for more information call raneL

at fall forum • october 23–25, 2012

CooP is already busy spreading the cooperative spirit. Send in your CooP sightings and track his adventures at

www.CatchthatCooperativeSpirit.coop

Tracie Kenyon ............................................Tel: 324-7203

Kara Connors .............................................Tel: 324-7377

Tabitha Garvin ...........................................Tel: 324-7375

Jami Kirksey ............................................. Tel: 324-7460

Renee Lyman ............................................Tel: 324-7458

Rachael Milne ............................................Tel: 324-7459

Donya Parrish ............................................Tel: 324-7374

Beth Satre .................................................Tel: 324-7457

Karen Smith ..............................................Tel: 324-7376

Ranel Smith ...............................................Tel: 324-7456

Tracy Thornburg ........................................Tel: 324-7455

Go to www.mcun.coop/NetworkStaff for more information.