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Wash. league contacting CUs in Vancouver tornado

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FEDERAL WAY, Wash. (1/11/08)--The Washington Credit Union League was busy trying to contact credit unions with branches in a neighborhood of Vancouver, Wash., where a rare tornado touched down early Thursday afternoon. "The Washington league is currently phoning credit unions with branches in the Hazel Dell neighborhood," David Bennett, director of public relations, told News Now Thursday night. Vancouver has 17 credit unions, some of them with more than one branch. Bennett noted there were no reported deaths, but added there was "extensive damage. At least 1,200 homes are without power." The league and the Washington Credit Union Foundation "are assessing the need and working with all affected credit unions to make sure operations are running as smoothly as possible, he said. "The league/foundation will work with local credit unions to provide support where needed." According to the National Weather Service, the southwest Washington and northwest Oregon area sees about one or two tornadoes a year, usually in sparsely populated areas (KIRO.TV.com Jan. 10). Thursday's tornado downed power lines, uprooted trees, tossed shopping carts into cars and blew people across the street, according to the local news report.

CO-OP Financial Services donates 100000 to Biz Kid

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RANCHO CUCAMONGA, Calif. (1/11/08)--CO-OP Financial Services has donated $100,000 for the second consecutive year to Biz Kid$, a PBS television series designed to teach students about managing money. Biz Kid$ is in its second season of production and began airing on 279 PBS stations in 43 states last week. “Solid educational programs are crucial to build thriving communities, and CO-OP will continue to work in conjunction with our credit union partners to support these types of endeavors,” said CO-OP President/CEO Stan Hollen. Biz Kid$ is a joint project between Junior Achievement and the creators of “Bill Nye the Science Guy.” CO-OP, a credit union service organization, also supports Children’s Miracle Network and Credit Unions for Kids. CO-OP recently created a $1 million matching funds project for the Children’s Miracle Network to encourage credit union charitable activities.

WSJ columnist shops for HELOC remains with CU

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NEW YORK (1/11/08)--A Wall Street Journal columnist who was looking to refinance a home equity line of credit (HELOC) found--after thorough price shopping--that her credit union offered the best financing rates. Columnist Terri Cullen, who writes a weekly “Fiscally Fit” personal finance column for the paper, told her readers that she and her husband opened a five-year, $100,000 HELOC in 2003 to fund home improvements. With the end of the term approaching, they needed to refinance. After comparison shopping, they decided on their credit union (The Wall Street Journal Jan. 10). Cullen said her credit union offered a five-year credit line at 6.24%, and unlike her current line of credit, this one offered a fixed rate. She then checked with financial companies--bank and lenders--that she had conducted business with in the past, as well as her primary mortgage company--which would only go as low as 6.49% on the interest rate. Her bank said it would match the credit union’s 6.24% rate, but there were several caveats. Among them: she would have sign up for automatic monthly payments and transfer a minimum of $25,000 to the credit line; and she discovered--after examining the fine print--that there was an upfront interest-only period on the loan’s term, where the loan balance would not decline unless she made additional principal payments. Cullen’s last move was to check a financial information website--Bankrate.com--to do more comparison shopping. The lowest offer she found was a $100,000 line of credit with a 6.25% interest rate, but it was an adjustable-rate credit line. Satisfied that they had the best deal, she and her husband chose to refinance with her credit union.

WOCCU CUs come closest to meeting Islamic Sharia compliance

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MADISON, Wis. (1/11/08)--Credit unions come the closest among Western financial institutions to meeting Islamic Shari'a compliance for financial services, indicates a new technical report from the World Council of Credit Unions (WOCCU).
World Council of Credit Unions' new report shows challenges from Islamic law in establishing credit unions in Afghanistan. Here, members meet at Balkh Investment and Finance Cooperative in Mazr-i-Sharif. (Photo provided by the World Council of Credit Unions)
Interest paid to depositors on savings by western banks is considered a loan with interest and is not allowed under Islamic financial principles. However, financial cooperatives' mutual ownership and equal distribution of dividends may mitigate some of the law's restrictions and make credit unions attractive to Islamic savers and borrowers in developing countries and in the U.S., says the report. The report, "Supporting Credit Union Development in Afghanistan: An Overview of Issues Important to the Development of Shari'a-Compliant Cooperative Finance," outlines the challenges WOCCU confronts in establishing credit unions in the war-torn Islamic country. Robert Wieland, the author and researcher with Main Street Economics, looks at ways Islamic jurisprudence evaluates financial services and concludes credit unions may have the best chance to meet the needs of Muslim borrowers in the terms of their religion. Under Islamic law's Shari'a compliance, lenders may not charge riba (translated as "interest" or "usury") on money lent, nor pay interest on deposits held without truly sharing in gharar ("risk" or "uncertainty"), writes Wieland. Shari'a refers to financial transactions allowed by the Koran. Credit unions' mutuality, which distributes dividends, aligns more closely with Islamic law, Weiland said. "A truly mutualist institution would minimize the costs of achieving Shari'a compliance for its beneficiaries and, to the extent that profits were generated, these would accrue fully to the member-participants. This reading of Islamic jurisprudence should interest supporters of credit unions," he said. The report also discusses the types of financial products--including savings, investments and loans--and the way they may be developed for Shari'a compliance. Among the Koran's strategies for conducting financial business without violating the laws is a characteristic of generosity and forgiveness without penalty for loans and investments that go bad. Western financial practices run afoul of those laws in most cases. Complimentary copies of the 21-page report, funded by WOCCU's U.S. Agency for International Development Cooperative Development Program are available on WOCCU's website or through e'mailing research@woccu.org.

PHH Corp. receives 50 million break-up fee

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BALTIMORE (1/11/08)--Blackstone Capital Partners has given PHH Corp. a $50 million termination fee after a planned merger between PHH and General Electric Capital Corp.(GECC), along with the sale of PHH’s mortgage to Blackstone, fizzled last week (Baltimore Sun Jan. 10). PHH Corp. called off the $1.8 billion merger because Blackstone could not finance the deal. The merger was to be completed Dec. 31. Under the merger agreement, a wholly-owned subsidiary of GECC would have merged into PHH. GECC was to sell the company’s mortgage business to Pearl Mortgage Acquisition 2 LLC, a Blackstone affiliate (News Now Jan. 2). PHH is a provider of mortgage and vehicle fleet management services with many credit unions of clients. PHH purchased CUNA Mutual Mortgage in 2005, and 18 former employees of CUNA Mutual have since founded Greystone Residential Funding Inc. (News Now Aug. 8, 2007).

Baby boomer retirements will impact CUs

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MENLO PARK, Calif. (1/11/08)--Baby boomer retirements will have the greatest impact on the work force over the next decade, according to a survey of 150 senior executives with the 1,000 largest U.S. companies. Credit unions will want to take steps soon to address the issue. About 47% of senior executives surveyed viewed pending retirements as the biggest factor affecting their businesses going forward, according to a survey by Robert Half International, a staffing services firm specializing in accounting and finance (PRNewswire Jan. 10). “The looming retirement of baby boomers has captured the attention of business leaders who are concerned about retaining the expertise of their most tenured employees,” said Max Messmer, chairman/CEO of the firm and author of Human Resources Kit for Dummies. “Fortunately, many baby boomers are considering working past the traditional retirement age to stay active and continue earning. “Businesses that accommodate valued staff members who are not ready for retirements but seek new work arrangements, such as flexible or part-time schedules, are best able to keep top performers,” he added. “Consulting arrangements allow experienced individuals to remain challenged professionally, while maintaining the flexibility to pursue outside interests.” The 2007-2008 Credit Union Environmental Scan for Strategic Planning (E-scan), published by the Credit Union National Association, also notes that fears of a labor shortage are being fueled by pending retirements of baby boomers. “The obvious near-term solution is to take steps to retain those who you want to keep working,” the E-scan said. “But nearly 80% of companies surveyed haven’t taken any steps to accommodate older workers, even though more than one third of the companies agree that the aging workforce will have a significant impact on them, according to a MetLife study. “Whether credit unions will face labor shortages in coming years will depend on how well they groom employees for management and key positions,” the E-scan continued. “We’re living in a knowledge economy in which employees’ experience and skills determine whether a company succeeds or fails.” Ongoing training and development are crucial to keeping a credit union competitive, the E-scan concluded.

EDS printed states Social Security numbers on mailed labels

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PLANO, Texas, and MADISON, Wis. (1/11/08)--Electronic Data Systems Corp. (EDS) has seen no theft of data so far after Wisconsin officials disclosed Tuesday the company printed Social Security numbers on the address labels of a state agency's information brochures mailed to 260,000 people. The Plano, Texas-based information technology company, which provides information technology services to many credit unions, was hired by the Wisconsin Department of Health and Family Services to send 260,000 brochures to members of Medicaid, SeniorCare and BadgerCare services (The Wisconsin State Journal Jan. 9 and 10, and Computerworld Jan. 10). Credit unions serving members using the services may need to monitor accounts of members whose numbers were divulged for possible identity theft. The news adds another concern for credit unions and financial institutions facing issues related to data loss stemming from actions by or against third-party vendors--human error. Most data losses experienced so far stemmed from theft--cybercriminals capturing information from web sites, databases, stolen laptops, and mail. Bill Ritz, spokesman for EDS, told The Wisconsin State Journal that there were no reports of illegal activity involving the information so far and that people were getting unnecessarily alarmed. The error was an isolated incident that occurred when the address file was created for mailing and was a human error, not a system error, he told Computerworld. EDS identified the source and took appropriate action to ensure it doesn't happen again, he said. The company set up a hotline and planned to mail letters to inform affected individuals next week that would outline details about free credit monitoring EDS would pay for over the next year. Wisconsin Deputy Secretary Karen Timberlake said EDS has been a vendor for state Medicaid services for the past 30 years. It has sent out similar mailings often, and this is the first time something like this has happened, she said. (Computerworld). The mailing was supposed to go to 485,000 of about 800,000 members enrolled in the state programs, but EDS caught the error midway through the mailing process. This is the second time within a year that an agency in the state has mailed out Social Security numbers on address labels. In December of 2006, about 171,000 taxpayers received a mailing from the state Department of Revenue with their Social Security numbers displayed on address labels. Wisconsin Gov. Jim Doyle ordered all state agencies to review their procedures for protecting personal information.

CU System briefs (01/10/2008)

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* BATON ROUGE, La. (1/11/08)--Pelican State CU has bolstered its educational youth accounts to offer rewards for academic excellence, as well as $5,000 in youth scholarships to its youngest members (Louisiana Credit Union League's eNews Jan. 9). The Pelican youth accounts are broken into three clubs that charge no monthly fee and earn high dividends. These accounts are based in financial education and emphasize the importance of savings and schoolwork … * CAMP PENDLETON, Calif. (1/11/08)--A federal grand Jury in Las Vegas indicted a 24-year-old Marine Wednesday for allegedly stealing $39,000 from the share accounts of 15 enlisted Marines, while they were deployed in Iraq (Los Angeles Times Jan. 10). Edgar Alejandro Hermosillo allegedly obtained access to the account numbers at Pacific Marine CU while on active duty in Camp Pendleton. Hermosillo is charged with arranging for money to be sent to accounts in New Mexico, Nevada and Texas, using the illegally obtained account numbers, authorities said … * MACON, Ga. (1/11/08)--Police arrested two suspects Wednesday wanted for a Dec. 28 armed robbery at Park Community FCU's Macon, Ga., branch. Authorities arrested the two suspects at a motel in Pensacola, Fla. (The Macon Telegraph Jan. 10). Merkuri Stanback and Camilla Davis face charges of armed robbery, kidnapping and possession of a firearm during the commission of a felony. The two suspects, along with Frederic Clay, who was previously arrested in Macon, Ga., are accused of taking about $200,000 from the credit union. The robbers tied up credit union employees and customers, keeping them in a room during the robbery … * WINFIELD, Ind. (1/11/08)--Members Advantage CU, Michigan City, Ind., was robbed by two armed men shortly before the credit union closed on Friday. The men entered the credit union wearing ski masks and jumped over a counter toward a teller, according to the credit union’s manager (Post-Tribune Jan. 9). The manager activated a panic alarm and locked herself in a bathroom. The men took an undetermined amount of money from the drawer and vault, and forced the teller into another bathroom until they left. No one was injured. Members Advantage has $60 million in assets ... * CLOQUET, Minn. (1/11/08)--The Members Cooperative CU Board of Directors has named Tammy Heikkinen as president/CEO. She began her position Jan. 1, replacing Del Prevost, who retired in October (Pine Journal Jan. 10). Heikkinen has worked for Members Cooperative for 25 years and currently serves as vice president of operations. She also served as interim CEO during Prevost’s medical leave. Members Cooperative has $237 million in assets ... * LATHAM, N.Y. (1/11/08)--Albert D'Orazio, 74, former board chair of the New York State Credit Union League, died Tuesday in Cheektowaga, N.Y. He was a director from the Buffalo chapter and served as league chair from 1999 to 2001. He was past chairman of the league's Government Affairs and Bylaws Ad-Hoc Committees and a board member of CUC Mortgage Corp. and CUC Management Inc. D'Orazio joined Shredded Wheat FCU in 1952, as a new employee of National Biscuit Co., to get a car loan, and began volunteering at the credit union. In 1963, he helped organize Local 36 AFGM FCU, Cheektowaga, and served as secretary and then treasurer for more than 30 years. "Al was always ready and able to represent the credit unions of New York State when he served as league director and chairman of the board," said league President/CEO William J. Mellin. "He continued that commitment to the credit union movement until he passed." D'Orazio is survived by his wife, Dorothy; sons, Thomas, Daniel and Nicholas; daughter, Tina; nine grandchildren and six great-grandchildren …