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Michigan Credit Union League Home » Information Services » Publications » Contact » 2007 » 2nd Quarter » MCUL Year in Review 2006  

Choppy waters for the Michigan economy — but generally smooth sailing for Michigan credit unions — is a suitable metaphor for 2006 in Michigan’s credit union industry.  Despite the shock of layoffs, buyouts, a shrinking tax base and declining real estate values, Michigan credit unions coped well, posting solid numbers and effectively meeting the needs of their members.  More than that, credit unions responded to Michigan’s economic challenges and met their social mission in new and innovative ways — displaying the maxim that extraordinary times require extraordinary actions.

No more significant example of the credit union spirit of service before profit could be found in 2006 than the launching of the innovative “Career Transition Program,” which provides low-cost education loans for members displaced by recent job cuts in the auto and manufacturing industries.  Through the program, credit unions have created a multi-million dollar pool of capital available for low-cost loans to members who have lost their jobs and are in need of new training and education in a changing employment market.  The program is not only helping displaced workers, it has also resulted in numerous favorable media reports highlighting the credit union not-for-profit difference.

The MCUL Education program continued its tradition of providing information, insight and value to member credit unions in 2006.

Outgoing MCUL Chairman James Dahl, right, passed the chairman’s gavel to his successor, Terry Pierce, in May.

State Rep. John Moolenaar, R-Midland, was one of numerous legislators who participated in the Financial Literacy Challenge in April.

Michigan chapters held numerous successful grassroots legislative advocacy events in 2006, including the Grand River Chapter Legislative Breakfast held in March.

Michigan’s underperforming economy was in stark evidence in the State Capitol as declining revenue and growing funding demands put a heavy strain on state government finances. In addition, the Michigan Legislature’s decision to accelerate the phasing out of the Single Business Tax (SBT) will result in a loss of an estimated $1.9 billion in annual revenue beginning in 2008 — a huge shortfall looming on the horizon that will have to be addressed.

The MCUL has remained alert and prepared throughout the state budget crisis, ensuring that credit unions, as not-for-profit financial cooperatives, remain exempt from corporate income taxes.  Thanks to the work of the MCUL and credit union grassroots advocacy efforts, credit unions enjoy strong and constructive relationships with our state’s elected officials — and broad support for credit union issues, including preservation of the tax exemption.

Michigan Earned Income Tax Credit (EITC) legislation became law in 2006, a bill strongly supported by the MCUL for its potential to help Michigan’s low-income working families.  The new state EITC law enhances the value of the Michigan credit union community’s “Just File It!” campaign, which provides families with an affordable alternative to income tax filing companies and high-interest refund anticipation loans.
Last November’s general election produced numerous changes in Lansing and Washington — but credit unions were among the biggest winners.  Of the 134 candidates endorsed by the MCUL based on their pro-credit union positions, 127 were victorious in their individual races.  Both Gov. Jennifer Granholm and U.S. Sen. Debbie Stabenow, D-Mich., were supported by the MCUL and coasted to re-election by double-digit margins.  Granholm’s gubernatorial opponent had been officially endorsed by the Michigan Bankers Association.  Credit unions ended the year certain to have a strong and influential voice in the 2007-08 Michigan Legislature.

In Washington, the CUNA-backed Financial Services Regulatory Relief Act of 2006 cleared Congress and was signed by President Bush — but credit union leaders know that much more still needs to be done to provide credit unions more flexibility and improvements in their ability to serve their members.  Efforts to pass CURIA, the Credit Union Regulatory Improvements Act, fell short in 2006.  Still, these efforts laid the foundation for future victory, provided credit unions remain united in purpose and continue to persuade members of Congress of the benefits of CURIA for the American consumer.

A key component of the credit union movement’s successful legislative advocacy efforts are the MCUL’s strong and well-funded PACs.  Closing the books on 2006, Michigan credit unions raised $341,396 or 76 percent of the combined PAC fundraising goal of $450,000, up more than $12,000 from 2005.  Credit unions raised $238,104 or 79 percent of the $300,000 MCULLAF (federal PAC) goal and $103,292 or 69 percent of the $150,000 MCULAF (state PAC) goal.

The MCUL continued to follow its three-tiered strategic approach to credit union advocacy in 2006 — expanded cooperative advertising; the Community Reinvestment Initiative (CRI) and its emphasis on the credit union social mission; and intensified legislative advocacy efforts.
Michigan credit unions maintained the momentum of their largest and most ambitious cooperative advertising effort in history.  Surveys confirmed its tangible impact, as Michigan consumer awareness of credit union uniqueness and the benefits of membership both increased in the wake of the advertising campaigns.  At the beginning of the new year, Lee Ann Mares arrived in the new position of CUcorp Growth Solutions Vice President, bringing an extensive resume of 22 years of marketing experience.

Through CRI, Michigan credit unions coordinate and document their community service activities to underscore what makes them different from banks.  This program has become a model for the entire nation as Michigan credit unions showed their strong commitment to their social mission, participating in and funding activities that help both their members and their communities.  In addition, CRI provides a catalog of examples of the credit union social mission — tangible evidence that can be presented to lawmakers, the media and consumer groups in defending the credit union tax exemption and the unique position of credit unions in the marketplace.

The fact that credit unions continue to fulfill their mission was reinforced last year when both the NCUA and the Governmental Accountability

Michigan Gov. Jennifer Granholm personally attended and spoke at the press conference in Dearborn that launched the innovative Career Transition Program in October.

The MCUL Governmental Affairs Conference was once again a success, and credit union leaders gathered in March to hear from guests that included OFIR Deputy Commissioner Roger Little and NCUA Board member Gigi Hyland.

Grassroots efforts, personal contacts — and creativity — have marked the MCUL’s highly successful legislative advocacy efforts.  Above, left, U.S. Rep. Sander Levin, D-Royal Oak, was all smiles when he received a baseball-themed gift basket from credit union visitors exposing the absurdity of the claim that credit unions enjoy an “unlevel playing field” when competing with banks.

The MCUL continued to foster strong and constructive relationships with both OFIR and the NCUA.  OFIR Commissioner Linda Watters visited several Michigan credit unions over the summer, including USA CU (OC).

Office (GAO) released the results of their studies on how well credit unions are serving their members — particularly those of “modest means.”  The data largely confirmed what credit union members have known all along — that credit unions are fulfilling the role intended for them by Congress in providing a favorably priced, cooperative alternative in the financial services marketplace.

Michigan credit unions continued among the national leaders in financial literacy education and the MCUL again partnered with statelawmakers in the Financial Literary Legislative Challenge, bringing legislators into the classroom to help promote financial literacy.  The “Financially Made” program was created by the MCUL to spark media interest in youth financial literacy.

The MCUL continued to develop its revolutionary Online Learning Center, expanding content and providing more credit union professionals and volunteers with convenient electronic access to a wide spectrum of education and training materials.  League InfoSight, the credit union on-line compliance information system, was further enhanced and expanded with more content and information, gaining in utility and popularity.

The MCUL also continued to move toward its innovative “Information Central” concept, which will provide credit unions, members and consumers with a comprehensive and easy-to-access source for timely news, important resources and key information.

The League continued its strong commitment to the success of small asset sized (SAS) credit unions, maintaining support through its relationship managers, scholarship assistance thought the Michigan Credit Union Foundation, and the innovative SAS Initiative Accounts, which allocate $600 for each SAS credit union to acquire needed products and services — including 990 tax form assistance.

Impressively, all of the MCUL’s achievements were accomplished while maintaining membership dues that are among the lowest for all state leagues in the country.  In 2006, sound financial stewardship maintained the Michigan League’s capital base and proud status as the best-funded credit union trade association in the entire world.  The successful financial performance of CUcorp continued to be an important element in keeping the MCUL’s membership fees low and affordable.  The strong net earnings of both CUcorp and CU Village effectively subsidize a portion of MCUL operations, helping to keep membership dues some 40 percent less than they would be without these subsidiary earnings.

T&C FCU (OC) President/CEO Dianne Addington became the 100th member of the Michigan Credit Union Hall of Fame in 2006.  Catherine Roberts, president/CEO at Research FCU (ME), was honored as the 2006 Michigan Credit Union Foundation Community Volunteer Award recipient, while Hank Hubbard, president/CEO at Communicating Arts CU (MW), received the 2006 International Credit Union Development Award.

Sadly, in each year, mortality claims its portion among credit union leaders.  Among those whom we bid a final farewell to in 2006 were Miriam Catherine Alfredson (Jan. 17), Kevin J. McCarty (Jan. 21), Richard MacDonald (Feb. 10), Edward G. Longman (Feb. 16), Bernice Randolph Bell (April 7), Richard J. Spence (May 2), Edward Alston (May 20), Larry M. Philippi (July 17), John Arnold (July 17), Marvin Schwab (Sept. 24), Donald C. Walters (Oct. 22), David J. Weichhand (Oct. 29), Frank O. Allee (Nov. 9) and Jack Dublin (Dec. 2).

There is no finer tribute and legacy to the collective memory of these and past credit union leaders than today’s credit unions — strong, united and a positive force in Michigan’s future.  In 2006, credit unions continued to play a critical role in helping Michiganians endure their present difficulties and build a better future — and the MCUL continued to do its part in helping credit unions accomplish this worthy mission.

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