Recently Ben Bernacke, Chairman of the Federal Reserve announced

that he would make no change to the interest rates Fed charges it’s

borrowing banks until 2013. What does that mean to the average

citizen? It means that the Federal Reserve Bank expects the recovery of our economy

to continue a slow, flat recovery for the next two years. What does that mean for our

membership? With interest rates remaining low, it means that your credit union’s earnings

will become stressed, as we continue to earn low rates on our investments, and at

the same time, for members it means that your borrowing rates will remain low, making

borrowing for that new vehicle, home improvement or new appliance.

Both of those two affects of low interest rates means that your credit union must continue

to look for ways to make the operation more efficient, look at our internal processes

for improvements and opportunities for cost savings. At that same time, when we look

at our processes we must look at all aspects, from how we package or bundle our services

to you, how much it cost the credit union to offer the service and product, and ensure

that we offer each of these services so they remain attractive to our members, as well as

offered in a manner that each service or product remains profitable.

While we remain profitable and well capitalized, with interest rates continuing to

remain at all time lows, we must make these changes to ensure that we are profitable in

the future.

Recently you received information about the new structure of our checking accounts.

As we looked at these accounts, reviewing how they were packaged we realized that

these accounts had had the same structure for more than twenty years. At the same

time, many more technology advances had been introduced and there were ways to

bundle our checking accounts, ensuring they remained attractive to our members, offering

the new services that have evolved over the last few years, and be less expensive on

the credit union. At the same time, if you have had your checking account at FCACU

for a long period of time, you were unaware of some of the new features services available

with checking accounts.

Our Pay-It-Forward Checking, with a corresponding Pay-It-Forward Savings is our

most popular checking account we offer. Pay it Forward Checking is a combination of

cost effective checking, tied to a high yielding savings account, currently earning 10%

a.p.y. All of our checking accounts have e-statements, e-alerts, bill pay, free remote deposit,

free online banking, free mobile banking. We still offer teller 24 for free for those

members that do not use online banking.

We are currently testing a reward checking account that we hope to introduce in late

October. We hope you will enjoy the monthly cash back reward that it will pay. Watch

your mail for details on the account, and how to change your account to a Reward

Checking Account.

While these new checking accounts are just some of the ways we continue to look at our

services, and make changes to offer you the most attractive, innovative services, at no

cost to you. We hope you like our Pay It Forward Checking, and our Reward Checking

when it is available.

Thank you for your continued support of your credit union. Your membership is

important.

Nancy M. Croix Stroud

President

Without question, the last two years, and 2011 continue to be years

of a challenging economy. Challenging for not only our members, but

also for your credit union. High unemployment, downsizing at

companies, an unstable economy, all continue to be issues everyone

deals with on a daily basis, not only personally but in their businesses or places of

employment as well. When other financial institutions have struggled to maintain

positive capital adequacy – the benchmark is 7 percent – your credit union continues

to maintain well above 7% and is considered a well capitalized credit union.

While we remain well capitalized, that does not mean that we are not changing our

processes to become more efficient, changing service providers for more favorable

terms, or favorable terms of delivery of services. We are in the midst of examining

all our of services, processes looking for duplications of services, and how to trim the

costs of duplication or excesses.

An example of this is recently you were notified that the credit union would no longer

deliver statements both by mail and electronically. Those members who were currently

receiving statements both electronically or by mail were notified that we would

begin delivering statements only one way, electronically in order to stop duplication of

services, and at the most cost effective means for the credit union. Electronic delivery

of statements is not only more economical for the credit union, it is more convenient

for those members who receive their statements electronically. Those members receive

their statements at the close of business each month. Those statements are in our

electronic member’s hands the first day of business of the following month, meaning

those members have their statements on the 1st day of the month.  Those members

are able to balance their accounts faster, be more accurate, and view their transactions

online as they occur. Additionally, those electronic members are able to receive

electronic notification, called e-Alerts, on their cell phone or by email when they have

a deposit made to their account, if the balance on their account falls below a specified

amount (e.g. $100). If these members receive their pay by direct deposit this is

important as they are able to know immediately by an e-Alert that their payroll was

received on their account, all by a text to their cell phone.

Another upcoming change will be how we conduct our Annual Meetings in the

future. We have traditionally held a bar-b-que meal and meeting. As years have

passed the attendance has declined and the costs to hold the meeting and bar-b-que

have increased. We will still have our annual meeting, but next year’s location will

be changing, as well as the refreshments will change from a bar-b-que meal to light

refreshments, again to help curtail the cost of the meeting.

While these are just two of the very visible changes we are making to curtail expenses,

internally we are busy adjusting so that the credit union remains profitable. A profitable,

healthy credit union is our boards fiduciary responsibility to the membership.

While we understand that some of these changes are new, your Board and Management

team of the credit union must make very tough decisions to ensure your credit

union is here for another 82 years of outstanding service.

Thank you for your continued support of your credit union.  Your membership is important.

Nancy M. Croix Stroud

President/CEO

An unstable economy put fiscal distress on governments and

industries across the nation.  Fortunately, your credit union, and the

credit union movement was not impacted as negatively as other

industries.

In fact, when other financial institutions struggled to maintain

positive capital adequacy – the benchmark is 7 percent – your credit

union continues to maintain well above 7% and is considered a well

capitalized credit union.  Our capital level as of December 31^st is

7.75%.

What does this mean to you?  It means your credit union operates in

a safe and sound manner.  It means when other financial institutions

pulled back on making loans, First Class American Credit Union

continued to make solid loans to our members.

It means, when other financial institutions assessed more fees or

compromised service in order to improve their bottom line, First

Class American Credit Union not only paid dividends, but was  also

able to offer additional services, which I will touch on later.

What does this tell us?  Savings at credit unions, and at First Class

American Credit Union, our members put their trust in us.  By

making your money work harder for you, you put your trust in your

credit union. 

I, as well as our staff, and your Board of Directors, take very seriously the trust you have put

in us to lead this institution, and I assure you that we are guiding

First Class American Credit Union with integrity and a heartfelt

commitment to you, the member/owner.  Your credit union is operated in a safe and sound manner, and receives excellent reports from not only our regulators, Texas Credit Union Department and National Credit Union Administration, but also from our internal auditors.

Without your confidence and support, and without the diligent work of our staff; the guidance of our board of directors, 2010 would have been just another year.  But thanks to all of us working together, cooperatively, for a common cause, we had an amazing year.  And I say amazing because let’s face it, 2010 was a tough year!

We adapted.  We overcame.

Our accomplishments in 2010 serve as a clear reflection on where we are today, and who we strive to become in the future.

As your President and CEO, it has been my distinct privilege to serve you and work with you in accomplishing our many significant milestones throughout the past year.

Please allow me to highlight some of the milestones:

1. 1.   A profitable credit union, earning an income of .76%, before NCUSIF assessments.  One of the highest earnings CU in our city.
2. 2.   New products/ services;   Remove deposit, mobile banking,
3. 3.    New Select Employee Groups – Recaro was a group added during 2010, and Sara Lee was added this month, bringing 600 employees credit union services.

As a credit union, and the rapid changes coming out of

Washington, making demanding changes on financial institutions,

your credit union is not exempt from those changes, some of

which threaten the ability to offer services.

In the past several years you have heard from us many times on

what we call Interchange Fees.  You have also heard from

retailers concerning Interchange. 

Interchange is what retailers pay financial institutions for

accepting payment by either a debit card, or a credit card.  The

interchange fee gives the merchant immediate payment, without

worry of an insufficient check, fraud, defaulted payments on a

credit card.  All of this risk is born by the issuer of the debit card

or credit card.  In this case, your credit union.

Last November Washington passed the Financial Services Bill,

which included new rules concerning Interchange Fees.  Those

new rules include limiting the amount of Interchange paid for

acceptance of debit or credit cards to either 7 cents or 12 cents

per transaction.  This greatly impacts your credit union and its

ability to offer these services in a profitable manner.  Your credit

union has been working to lobby members of Congress and your

Senators to STOP this new interchange rule.  This rule is harmful

to your credit union, and as a consumer will require us to pass on

additional fees to you, the consumer, to offer these products.  I

would urge you to visit the blog.

www.StopTheNewDebitCardRule.com

This bill would pass $20 BILLION back to the retailers, yet not

ONE retailer would promise that this additional savings would be

passed back to you the consumer in the form of lower prices.

I urge you to write Congress, and your Senator, tell them you

want them to support stopping the Interchange Rule.  Tell them

you want them to stop the rule, study the issue, and discuss it with

the financial community. 

Credit unions are like no other financial institution. We are more

than just a place for people to conduct their financial business. We

are truly “people helping people,” reaching out to you, our members

with a true desire to improve our community.

When you walk through the doors of First Class American  Credit

Union, you aren’t just a customer. You are part of a member-owned

financial cooperative. You are part of our credit union family, and

we are committed to serving your financial needs.

And as we embark on a new year, you can have faith that your

credit union is committed to meeting all of your financial service

needs. Your future financial well-being is a priority for us.

Thank you for your continued loyalty to First Class American Credit Union.  Without you, we would not be here for our membership.

Contact Congress Today!

Dear Member-

I am writing to you about an issue that could negatively impact you and all members of our credit union.  The U.S. Congress is considering legislation that would reduce the amount of interchange fees paid by merchants when they accept a credit or debit card for payment.  Interchange fees help pay the cost of processing credit and debit cards payments, with a portion going to card issuers like our credit union to cover risk and operations cost.

How did interchange fees come about?  From the mid-sixties, since the inception of a universal credit card,  VISA and MasterCard have paid the issuing financial institution of the credit card what is referred to as interchange income.  This small fee (approximately 1%, or $1/$100) each time a purchase was paid, by use of a credit card, or when debit cards evolved on a debit card transaction.  This fee is to reimburse the financial institution with costs associated with the issuing of the card.  Some examples of the costs would be fraudulent transactions, defaulted credit cards, re-issue of cards in the case of fraud, losses from non-sufficient funds checks.  For instance, if someone steals your card, and uses it at a retail store, you dispute these charges, the losses are born by the financial institution, not by the retail merchant that processed the fraudulent transactions.  Additionally, when a retail merchant has a breach of their data base, credit/debit card numbers are compromised or stolen, the financial institution has to cancel the compromised card and reissue the cards to help prevent you, our members, suffering losses from fraudulent transactions.  All of these costs are born by the financial institution, or in this case, First Class American Credit Union not by the retail merchant.

This issue is important to you, a member and owner of this credit union, since roughly 15% of our annual net income is derived from interchange income.  It allows our credit union to offer low-or-no cost products and services including free checking, low interest rates on loans, no annual fee credit/debit cards.  Interchange income also helps absorb the cost of fraud that takes place on credit and debit cards.

A significant loss in interchange income could mean our credit union would have to charge more fees, increase interest rates on loans, or even suspend some products and services.  Credit and debit card programs are an important service, but if merchants don’t pay for their benefits of the system, it’s unfair to you, our members.  Your credit union does not want to have to institute fees for your use of this product/service.

Credit and debit cards have removed the risk of payment for retailers.  When retailers accept checks, they bear the risk for the check.  If the check is bad, the retailer doesn’t get paid.  On the other hand, if a person doesn’t pay their credit card bill, or if there’s fraud, then the credit union still pays the retailer.  To cover these risks and the cost of the system, there’s a small fee on each transaction paid by merchants, the interchange fee.  And the risk is substantial.  For instance, recently when Office Max and TJ Max had a card breach, your credit union suffered over $17,000 in these fraudulent transactions.  Recently Heartland Payment systems suffered a security breach.  Estimated losses to your credit union from the fraudulent transactions, the complete cancellation of cards and re-issue of cards affected cost $8700.  These are direct costs to your credit union.  This also causes inconvenience to you.  While we cancel, re-issue the card, and send a letter to notify you of the cancellation and reissue of your card, you have the inconvenience of not having access to your account in the approximate 10 days it takes to get the new card to you.

Merchants claim that interchange fees add to consumer’s costs and argue that if the fees were reduced, the savings would be passed on to their customers.  Yet, in a recent Congressional hearing, a merchant trade representative said his industry would object to any language in the bill that would ensure savings would be passed directly onto the customer.  Clearly it’s not about saving consumers money at all. 

To express your opposition to harmful interchange legislation please to www.cuvoice.com and send an email message directly to your congressional representative.   This is a very user friendly website that once you put your name and address automatically directs your email to your congressional representative.  The email site also includes a sample letter for your use to generate a letter to your congressional representative and senator.   The more credit union members that weigh in on this issue, the greater chance we have to stop the legislation in Congress.  Let YOUR voice of YOUR credit union be heard!

Thank you for your support.

First Class American Credit Union

P O Box 162539

Fort Worth, Tx.  76161

2595 Polaris Dr.

Fort Worth, Tx. 76137

817-834-9777, ext 280

817-834-9770, fax

www.fcacu.org

 This year we have spent a great deal of time on expanding our currentservices and implementing new services.  Most recently  we have expanded our mortgage program to increase the types of mortgages to meet our member’s needs.  During the first quarter of the year we began offering FHA loans.  Most recently we have been approved to offer VA loans to our members, through our mortgage partner, CU Members Mortgage.

VA financing has many benefits for home buyers.  VA loan financing  has many benefits to consider when choosing your mortgage loan.

•  Financing is usually 100% with no down payment
• Private Mortgage insurance is not required.
• There are no penalties assessed if you prepay the loan
• All closing costs can be paid by the seller
• Competitive interest rates
• Competitive terms of financing options and lengths as compared to traditional loans.
• Level principal and interest payments for the full term of the loan.
• Allows for higher loan amount qualification and enhanced buying power.

VA financing is a good choice if you are:

• A Veteran wishing to take advantage of your VA home loan benefits
• You need your monthly payments to remain fixed over the life of the loan.
• You are seeking 100% financing (no down payment).
• You plan on staying in the home long-term.

If you are searching for a mortgage product, check out your credit union.  Through our mortgage partner, CU Members Mortgage, we offer not only conventional mortgage loans, FHA financing and VA loans.  You can apply online through our website, just click on the mortgage application icon.

Additional products that we will soon have available are remote deposit to your account at the credit union.  Soon we will have available two different ways in which you can deposit to your account through our 1stBranch banking, without having to come to the CU, or visiting a shared branch location, to make a deposit to your account.  If you have a scanner at home, or work, you will be able to use our Express Deposit and scan your deposit in through 1^st Branch banking and have the deposit credited to your account.  You will keep the original check to make sure the deposit hits your account, and once the check is in your account, and we confirm receipt you can shred the check.  The second way to deposit through 1stBranch is by Priority Deposit.  When using Priority Deposit you will deposit the check through 1^stBranch banking, print the specially generated deposit slip and mail the check and the system generated deposit slip to the credit union.  You will have 10 days to get the check to the credit union.  These two services, Priority Deposit and Express Deposit allow you to make deposits to your account, without having to make a trip to the credit union.

Later this year we will also have Mobile 1^st banking available.  This service will allow you to have access to your account at the credit union through your PDA/Smartphone or cell phone.  You can receive text messages from your account, check your balances, and access your account through 1^st Branch on your hand held device.

We continue to look for ways to make your account at the credit union convenient, and be truly, available anytime, anywhere.  We continually look for ways to serve you, and striving to continue to meet our vision to you,

1^st in Service

      1^st in Quality

            1^st in Value

Members are receiving emails stating the member has a MESSAGE ALERT and to log in to online banking.  A link is provided to a FAKE First Class American website.  When the member logs in to the FAKE online banking the member is asked for information such as Name, debit card number and ATM PIN. DO NOT RESPOND. Financial Institutions will NEVER ask for this type of information. This is a SCAM. One indication that you are on the FAKE website, is when you log in to online banking you do not see the security question page. Our website is SECURE. When logging in to online banking on our FCACU site you will always be asked a security question.

Business as Usual at First Class American

r     Recently there has been coverage in the media regarding the National Credit Union Administration (NCUA) take over of two big credit unions.  These two credit unions, U.S. Central Federal Credit Union in Lenexa, KS and WesCorp Federal Credit Union in San Dimas, CA, are not regular credit unions like ours that serve the consumer.  They are “corporate” credit unions that provide liquidity, investment and payment services to other credit unions.  These two corporate credit unions, like many other financial institutions, have seen their investments decline in the current economic downturn, and the losses were significant enough that the NCUA had to step in and place these credit unions into conservatorship, which means the credit unions continue to operate, but the NCUA has taken them over. First Class American does not have deposits in either of these two corporate credit unions, so we remain the strong financial institution our members expect us to be.

What does this mean for members of First Class American?

r     It is business as usual.  You can expect the same level of service from your credit union.  Our service to you is not affected by these actions of NCUA

.

r     Your funds are perfectly safe with First Class American. Your deposits are insured up to $250,000 by the National Credit Union Share Insurance Fund, and backed by the full faith and credit of the U.S. Government, just as FDIC does for bank deposits.  No credit union member has ever lost a dime of federally insured funds.

r     Credit unions that serve the consumer are very strong and the credit union sector over all is strong and healthy.  Why?  Because credit unions that serve consumers do not typically participate in the questionable loan practices that have gotten so many banks in trouble.

r     First Class American is very well capitalized and still has money to lend. As of December 31, 2008 our capital-to-assets ratio was 8.59%, well above the 7% industry standard for being “well capitalized”.

r     Credit Unions have been serving member for 100 years, through good times and bad.  With our solid capitalization and sound, fiscally responsible philosophy, First Class American is well positioned to weather this economic downturn.