CUcorp, the Michigan Credit Union League (MCUL) fee-based subsidiary, achieved several milestones in 2005. It proved to be another year of exciting progress and growth, as CUcorp continued to provide innovative, high quality and competitively priced products and services. This success was reflected in the corporation’s strong financial performance in 2005.
Financially, CUcorp experienced positive results in 2005 with gross income of $8,841,076 leading to net income before taxes of $727,482. For the third year in a row, the CUcorp Board of Directors voted to distribute a dividend to MCUL in the amount of $245,644, half of CUcorp’s net income after taxes. CUcorp’s net after-tax income of $491,290 provided CUcorp a 13 percent return on equity — a remarkable accomplishment given the sluggish Michigan economy.
CUcorp’s achievements are a direct result of the innovative and enthusiastic work of its employees and the support of its credit union clients. In 2005, CUcorp continued to seek opportunities to provide credit unions with products, services and partnerships in areas where it has a distinct competitive advantage.
The year ended with renewed confidence that 2006 will be marked by further progress and prosperity. Here are some 2005 highlights from each CUcorp division.
Value Added Partnering – VAP
There was a great deal of new of activity in 2005 among current and new partners for the Value Added Partnering (VAP) Division, resulting in a very successful year.
VAP account executives continued to focus on building and expanding relationships with credit unions in both Michigan and Ohio. A key priority was working closely with credit unions to gain a better understanding of their specific needs and strategic objectives. The focus continues to be not just selling products but providing solutions, helping each credit union accomplish its specific objectives.
VAP business consultants made more than 900 visits to Michigan credit unions and attended some 50 chapter events and annual meetings in Michigan and Ohio, including the MCUL and Ohio League annual conventions. VAP also continued to work in conjunction with the MCUL to take advantage of sponsorship opportunities, which included special events at such venues as the MCUL Marketing Conference, Lending Conference, Executive Summit and Government Affairs Conference.
Nine Michigan credit unions partnered with Centrix on their Portfolio Management Program (PMP) and funded 1,881 auto loans valued at more than $31,225,000. These credit unions also purchased portfolios with 842 loans worth $13,977,000 during the first six months of the year for a total of $45,202,000 in auto loans.
The overdraft privilege program through John M. Floyd & Associates (JMFA) also performed well. Nine new credit unions were added to the program and CUcorp income increased by nearly 150 percent. By the end of the year, 48 credit unions were participating.
In August, the JMFA new Overdraft Privilege Compliance and Performance Review program (CPR) was introduced. The CPR is primarily based on the new interagency guidelines but also focuses on consumer friendliness and the program’s performance. The CPR reviews credit union programs and performance for Regs B, E, Z, DD and the Federal Trade Commission Act, while determining which processes could be streamlined. The review is free of charge to any interested credit union.
The Credit Union Dealer Indirect Lending and Leasing (CUDILL) program posted remarkable gains in 2005. Loans submitted were up by nearly 500 percent and loans funded increased 315 percent. By the end of the year, 12 credit unions were participating and dealers had submitted 1,738 loans through the CUDILL system. Credit unions funded 456 loans valued at more than $4.5 million.
Accel, the financial management and member education program offered through GreenPath, grew by 38 percent, boosting revenue to CUcorp by nearly 50 percent. At the end of the year, 48 credit unions were providing this service to their members. Accel is sold in 17 states and nearly half the credit unions on the program are in Michigan.
In October, GreenPath Debt Solutions/ Accel Members Financial Counseling was approved by the U.S. Trustees Program of the Department of Justice to be a nationwide provider of the pre-discharge bankruptcy education required by the new Bankruptcy Code. With this approval, GreenPath/Accel became the only national provider approved for both pre-filing counseling and pre-discharge education.
In conjunction with the CUNA Mutual Group, CUcorp provided IRA training for some 245 credit union staff representing 130 credit unions. Six sessions were held during the year in Escanaba, Mt. Pleasant and Livonia.
In addition to promoting current product offerings, CUcorp also announced partnerships with The Staver Group and Mortgage Center in 2005. The Staver Group’s Credit Union Leadership Development Institute is a comprehensive, long-term process that adds knowledge, depth and focus for current executive
level leaders while helping credit unions prepare to meet the future need for skilled executives.
A partnership with Mortgage Center was announced in July after a lengthy due-diligence process. As a wholly owned Credit Union Service Organization (CUSO), Mortgage Center has provided innovative mortgage programs for more than 15 years and serves more than 60 credit unions and their members.
GeniSys Lending and Payment Solutions
GeniSys Lending and Payment Solutions ended 2005 with another year of positive achievement. Major factors in the success of GeniSys included:
- Incorporating Ukrainian Future CU and Ukrainian SelfReliance CU, which added 4,100 new credit accounts;
- The addition of 40 new card programs, including 37 Platinum Preferred — highest in the nation;
- 20,000 Stored Value Gift Cards — highest in the nation;
- Launch of the new Business Visa credit card;
- Implementation of the Instant Issue Debit/Credit and Gift Cards;
- A NYCE Marketing agreement assisting CUs with POS, terminal driving and ATMs;
- Eight Marketing Sessions that assisted credit unions with growing their card programs;
GeniSys held two promotions to assist credit unions with portfolio growth and development. The “Think Outside the Bowl” promotion offered an introductory rate of 2.5 percent for 6 months on any new credit card account opened between Jan. 1 and March 31. GeniSys paid participating credit unions $1 for each new credit card that was opened during the promotional period. Nine credit unions participated in the promotion, resulting in 1,000 new accounts.
The “Street Wise and City Smart” promotion offered an introductory rate of 3.9 percent for 6 months on any new credit card account between Sept. 1 and Dec. 31. A total of 13 credit unions participated, generating 1,100 new accounts. GeniSys also tracked 13 credit unions of similar size that did not participate, and the credit unions that did participate either doubled or tripled their card sales.
GeniSys launched the new Business Visa Credit Card to assist credit unions with business services. GeniSys also launched the new Instant Issue of credit and debit cards with Dynamic Solutions International. The Instant Issue gives credit unions the flexibility to issue a card to their members right on the spot.
The CUCare Group
The CUCare Group continued its upbeat pace, ending the year with a record net contribution to CUcorp, up more than 10 percent over 2004. CUcorp’s association-sponsored health care program through Blue Cross Blue Shield of Michigan (BCBSM) remains The CUCare Group’s core product.
Significant contributing factors in The CUCare Group’s success included an increase of 4 percent in BCBSM service fees and a 2 percent increase in BCBSM agent commissions. Renewals from existing Operations Policies Manual clients remain above a 90 percent renewal rate.
The CUCare Group concluded talks with on-line job posting giant, CareerBuilder, to form a partnership for a credit union industry specific product — CUcareerbuilder.com.
The program provides a minimum savings of 25 percent of the regular CareerBuilder price and is available to any credit union, league or CUSO in the nation. The program kicked off at the 2005 MCUL Annual Convention and Exposition and began paying incentives from the first quarter. Revenues topped $50,000 for the first six months.
Images & Ink
Images & Ink (I&I), CUcorp’s marketing solution for credit unions, focused on the development and expansion of its products and services while continuing to grow usage of its core offerings of credit union marketing material design and production.
As always, I&I focused on quality and a high level of customer service and satisfaction.
Throughout the year, I&I remained highly visible in the credit union marketplace by sending staff to credit union and league events in Michigan, Ohio and Indiana.
I&I expanded its product offerings in 2005 to include a partnership with Aelera Analytics Corporation, a consulting firm that delivers insights and solutions for member and employee relationship management, which generated more than $12,900 in sales.
I&I also launched a new youth program, just STASH it. The program is coordinated with the graphics used throughout Members’ Marketplace and includes marketing collateral such as welcome and birthday cards, statement inserts and posters.
Additional revenue generating products for I&I in 2005 included electronic forms for credit unions and money handling supplies and equipment.
The Sprint PCS Member Discount Wireless Plan continued to grow. Sprint’s merger with Nextel Communications, Inc., also created new opportunities for credit union members nationwide. The plan was well-received through 2005 with 70 credit unions participating and more than 20,000 members nationally taking advantage of the discounted services. The Sprint PCS Member Discount Wireless Plan became one of Sprint’s most successful programs.
Some 260 Michigan and Ohio credit unions participated in the Office Depot Cooperative Purchasing Plan. I&I focused on promoting the use of the plan through direct mail and telemarketing.
I&I was recognized for excellence at the Detroit Club of Printing House Gallery 15th Annual Superb Printing Competition. Some 272 entries from 47 different companies participated and I&I garnered six awards.
CU Village experienced both sales and earnings growth in 2005. Sales revenues were up 14 percent as CU Village posted $103,785 in net earnings after taxes and equity portfolio results. CU Village remains on solid financial ground. In addition, CU Village:
- Signed a new agreement with Raindance simultaneously increasing the profitability of the service for CU Village and reducing cost to clients;
- Launched a new comprehensive content management system giving clients the ability to easily manage their entire site from a Web browser without sacrificing functionally or design;
- Provided Web site and development services for more than 200 credit unions and nearly 10 credit union leagues;
- Continued to strengthen and grow the management contract held with League InfoSight. Under the contract, CU Village provides technical, business, administrative and managerial services. Approximately 15 leagues are served through the League InfoSight organization.
CU Village continues to work with the MCUL to develop the Online Learning Center, which features more than 2,000 course offerings covering a wide range of subjects — from management to technology to financial services. CUNA courses are also featured as part of the offering.
The Year in Review MCUL 2005
MCUL/CUcorp Consolidated Statements of Financial Position
MCUL/CUcorp 2005: Financial Report and Statistics
Consolidated Statements of Activities and Changes in Members' Net Assets
The Operating Environment
The Year in Review CUcorp 2005