Public Deposits - Letter to the Editor

The Huntsville Times published my "letter to the editor" this past weekend. I appreciate the newspaper publishing this submission. Below is the text of the letter;

Rep. Mike Ball and Sen. Bill Holtzclaw have filed bills in the House and Senate that would allow credit unions to become qualified public depositories. HB 315 and SB 299 seek to give credit unions the ability to accept public deposits, providing municipalities such as fire departments, schools, libraries, and local government entities a choice in where to put their money.

There is no legitimate reason credit unions should be prevented from being public depositories. Municipalities deserve the right to choose where to deposit their money. Credit unions are locally-owned and federally insured. Credit union profits get returned to the membership through lower fees, better loan rates, and better returns on deposits. Permitting credit unions to compete for deposits not only helps keep bank savings rates higher, it creates flexibility for municipalities and the opportunity for higher yields on the public deposits.

At a time when local and state government are tightening their budgets to find effective ways of managing public money, credit unions should not be forced to turn them away. This legislation is about choice – and the choice should be in the hands of municipalities working for the public, not in the hands of banks working for themselves. Thirty-three other states allow credit unions to accept public deposits, it’s time Alabama gives its municipalities a choice.

Sincerely,

Greg A. Olmsted, President/CEO
North Alabama Educators Credit Union

Children Away at College?

Parents with children attending college away from home know the difficulties of transferring money to their child for unknown expenses. College students also receive checks for a variety of reasons while at school. How can the parent and college student stay connected financially when they live far apart from one another?

North Alabama Educators Credit Union has a solution to meet a variety of financial needs for students attending college away from home. The Credit Union Service Center (CUSC) network provides over 4,400 branches nationwide where a member can transact basic transactions like deposits, withdrawals, loan payments, and check cashing services. For example, college students attending the University of Alabama and Auburn University have a branch nearby that is available for these type of transactions. Best of all, the branch access is free of charge.

A parent or guardian could deposit money into the student's account here in Huntsville and the student could withdraw the money from the CUSC location close to the school. If a student received a check for some reason at school they could deposit that check at the CUSC location as well. Again, these transactions do not have a charge which is better than withdrawing money at another financial institution's ATM that might have a hefty surcharge fee for a withdrawal. North Alabama Educators Credit Union is a member of the CO-OP ATM network which provides over 28,000 ATM's nationwide for free cash withdrawals.

Most college towns have a CUSC location nearby since most colleges and universities have a credit union nearby. To search for available CUSC locations, visit the online site at http://www.cuservicecenter.com/. The cooperative nature of credit unions working together to provide this expanded branch access is a valuable benefit for credit union members.

Fake Checks

Fake checks continue to circulate throughout the country. How can you spot a good check from a bad check? Not easily. The technology of printers today allow thieves to print off good copies of legitimate checks. This is why check holds on deposits are much more common now.

The best method of identifying a possible counterfeit check is by looking at the reasons on why the check was received in the first place. Strangers don't send checks for thousands of dollars to other strangers for no reason. If a check recipient is asked to send part of the check proceeds back to the stranger for any reason, there is a 99.9% chance that the check is a counterfeit item. Mystery shopper programs, sweepstakes and lottery contests, inheritance gifts from long lost (and unknown) relatives, payroll processing job offers using a consumer's personal account, and Internet sales where the buyer sends more than is needed for the purchase price are all examples of scams involving counterfeit checks.

Victims of these scams often say later that they had a bad or uneasy feeling about the fake checks being negotiated. They convince themselves though that the official check and overnight mail package could only have come from a "legitimate" entity. These same victims also refer to official looking websites and mail correspondence that looks like the real thing. Criminals can copy and reproduce anything. They try to build confidence in the victim's mind that the offer being presented is the real deal. Sadly, greed is also a contributing factor to many of these fake check scams as the victims are promised easy money for their efforts.

Don't be a victim. Ask your credit union or financial institution to research the item and be sure to provide all information about how the check was received. Depositing a counterfeit check item is a crime so be sure that all check items are legitimate BEFORE they are deposited.

The website below provides excellent resources and information regarding fake check scams;
http://fakechecks.org/

Scholarship Money from NAECU

Our annual scholarship contest is underway with $1,500 being available for our 1st place winner and $750 being available for our 2nd place winner. The scholarship application is available at any office or online at the link provided below. The deadline for submitting the completed scholarship application is Monday, April 2, 2012. (The form states April 1st but since April 1st falls on a Sunday we will accept applications through the following day).

The essay portion of the scholarship this year will be a typed essay of at least 250 words on "How can financial institutions improve their value to consumers?".

We would encourage our members who are graduating high school this semester to apply for the available scholarship money. Keep in mind that all students of public or private schools in Madison, Morgan, or Limestone Counties are eligible for credit union membership with North Alabama Educators Credit Union.

Best of luck to all scholarship candidates! Here is the credit union page for additional information and the scholarship application;

http://www.naecu.org/news/scholarship.html

Car Buying Tips

Buying a new or used vehicle is a major transaction for most consumers. Decisions made while buying a vehicle can impact the owner for many years to come. Shopping smart is good for any purchase but it is especially beneficial when buying a vehicle.

The high cost of vehicles makes it absolutely imperative that buyers do their homework BEFORE closing a deal on a new or used vehicle. If buying a new vehicle, find out what the invoice price is for that vehicle and what the cost over invoice is normally charged for the vehicle being considered. The sticker price on the window, or retail price, should not be used as a bargaining point for what the sale price should be. Consumer Reports and Edmunds are good resources for determining a fair price on a new vehicle. NADA and Kelly Blue Book are good resources for used vehicle pricing. Again, the "average retail" price is not the price value that consumers should be negotiating from. A fair price on most used vehicles would be splitting the difference between the "average retail" value and "average trade-in" value of the vehicle being considered. For example if the "average retail" price is $15,000 and the "average trade-in" value is $11,900, a fair sale price would be $13,450 for that particular vehicle.

Price negotiations for purchases and any trade-ins should be held mutually exclusive. A fair price should be sought for both transactions. Dealers are infamous for providing high prices for trade-ins and then adding the overage amount to the cost of the new purchase. This practice is also what causes many owners to become upside down on their vehicles, meaning that they owe more than the vehicle is worth.

The Credit Union would encourage members to shop our rates and terms first before shopping for a vehicle purchase. Our loan rates are publicly posted on our web site under the "LOAN RATES" tab. It is not uncommon for members to be told by a dealer that our rates are higher than the dealer rate when in reality the opposite is true. We recently had a good credit score member who was quoted a rate of 10% APR at a local dealer when the member was actually eligible for our advertised rate of 2.99% APR. North Alabama Educators Credit Union does have risk-based pricing for loan rates that are based upon the member's credit score. Even our "D" rated credit score members would be eligible for a fixed rate of 8.99% APR!

The fact is that dealers get paid from other lenders to push their financing to buyers. This is why dealers generally don't want members to finance their vehicles with the credit union. North Alabama Educators Credit Union would rather reward our member-owners with lower rates than to pay dealers $200-$300 for an automobile loan. At times, dealer financing may have a lower rate than the credit union especially when the financing is for a new vehicle. The key though is to verify available rates and terms independent of the dealer. Trust but verify is always a good policy to follow!

Merry Christmas from NAECU

Merry Christmas from your friends at

North Alabama Educators Credit Union.

Best wishes to you and your family

for a joyous and safe Christmas.

Christmas Loan

If you find yourself coming up a bit short on cash for the holiday season, our Christmas Loan is a nice gift. Qualified members can borrow up to $1,000 at a low fixed rate as low as 5.99% Annual Percentage Rate for a term up to 12 months. Consumers have been doing a much better job of reducing debt and increasing the amount saved throughout the year. The key to borrowing money is try to avoid it if possible. Shopping with your own cash is always more preferable than shopping with someone else's money and paying interest for the use of those funds. If you must borrow money, shopping for a good loan rate is worth the time and effort. Some credit cards, especially department store cards, have increased their finance rates considerably during the economic downturn over the past few years.

Our Christmas Loan will be available through the end of January 2012. The joys of Christmas shopping in December can often be soured by the credit card bills that arrive in January. Our Christmas Loan as well as other loan programs for higher balances could be used to greatly reduce finance charges being paid on outstanding debt.

Members of North Alabama Educators Credit Union who are interested in the Christmas Loan can review the rates and terms available on this and other loans at http://www.naecu.org/rates/loanrates.html.