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CUDL CUcorp partner in marketing Invest in America

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RANCHO CUCAMONGA, Calif. (1/22/09)--CUDL, a point-of-sale and indirect lending network for credit unions, has partnered with Livonia, Mich.-based CUcorp to promote "Invest in America," credit unions' nationwide auto lending program with General Motors (GM) and Chrysler. CUDL will promote the program to its 700 credit union partners, 20 million members, and 9,000 dealers nationwide. It also will facilitate credit unions' ability to provide member financing at more than 1,800 participating GM and Chrysler dealerships nationwide. In 2008, the CUDL Auto Lending platform generated $12 billion in credit union auto loans, said the Rancho Cucamonga, Calif.-based company. "Our goal is to help the program through CUDL's ability to facilitate member loans at the dealership and to further advance credit union auto lending growth and market share," said Tony Boutelle, CUDL president/CEO. The Invest in America partnership, which encompasses nearly 8,000 credit unions nationwide and GM and Chrysler dealers, aims to boost auto sales by making $80 billion of low-rate auto financing pledged by credit unions available to 90 million credit union members. The financing is added to purchase incentives provided by GM and Chrysler. So far, more than 8,000 new vehicles have been purchased through Invest in America since the program opened Dec. 8. David Adams, president/CEO of CUcorp and the Michigan Credit Union League, noted the partnership with CUDL will continue to push the discounts out to consumers. "It also expands GM and Chrysler dealership awareness and support for this important program. The bottom line is increased auto sales and more affordable financing through this partnership. This is meeting a critically important need for automakers." CUDL will increase member awareness and access to the discounts via its CUDL AutoSMART program. Participating credit unions can promote the program through their co-branded AutoSMART websites, where members can research automobiles and find deals through CUDL's inventory of 500,000 vehicles. In tandem with the CUDL partnership, CUcorp is working with GM and Chrysler to more effectively promote Invest in America through the dealership network nationwide.

Chicago CUs offer bailout advice in ITribuneI

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CHICAGO (1/22/09)--A couple of credit unions from the Chicago-area are offering advice in the Chicago Tribune for President Barack Obama on how to use the remaining $350 billion of the federal government’s bailout fund. Jerry Haley, president of the $39.8 million asset, Matteson, Ill.-based USA One National CU, said the restructuring of upside down mortgages--in which a homeowner owes more than the house is worth--is a good place to begin (Chicago Tribune Jan. 21). Because the current economic crisis started in the housing market, and due to the probability that a rebound in the housing market is likely needed to spark an economic recovery, putting the skids on foreclosures would be beneficial to the economy, Haley told the newspaper. Sandy Brillowski agrees that the Obama Administration needs to place the funds directly into programs--if not consumers’ hands--to stop foreclosures and help small businesses, she told the paper. Brillowksi, marketing vice president for the $149.1 million asset, Naperville-Ill.-based Hawthorne CU, said she believes an indirect route to helping people--such as with the recent Wall Street bailout--is too risky and time consuming.

CUNA Mutual offers advice on Heartland breach

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MADISON, Wis. (1/22/09)--CUNA Mutual Group is providing guidance to its Plastic Card Insurance policyholder credit unions regarding the Heartland Payment Systems breach. CUNA Mutual sent a RISK Alert Tuesday to its nearly 5,000 Plastic Card Insurance policyholders, which provides recommendations for credit unions to mitigate losses. On Tuesday, Princeton, N.J.-based Heartland reported that its processing system was breached sometime last year. Heartland is a third-party card processor used by 250,000 merchants nationwide. Visa and MasterCard also have confirmed full magnetic stripe data from credit and debit cards have been compromised. “Although the exact number of affected cards is not known, it is expected to be many millions,” said Chuck Cashman, CUNA Mutual Plastic Card Insurance product executive. Credit unions are receiving lists of compromised card numbers and must sort through the lists to find members’ card numbers, then determine if the cards will be blocked or re-issued. “Everyone has their nose to the grindstone looking at the lists,” Cashman said. “It’s very time-consuming.” Credit unions who re-issue cards will have to bear the cost. Given a struggling economy, “the extra expense can be detrimental,” Cashman said. Replacing cards can cost $15 to $25 per account. A sniffer is rumored to have caused the breach. Sniffers are placed on communication lines, such as a server, to capture information. Sniffers collect information, which is then unencrypted and normalized by the recipient. Sniffers can be used legitimately, but fraudsters also use them to make counterfeit cards. Credit unions need a fraud management system, but if fraud strikes on the merchant’s [or processor’s] end--like it did with Heartland--“they are kind of stuck between a rock and a hard place,” Cashman said. It could take months for Heartland’s impact to be realized. The TJX Cos. breach in 2007 took a few months to sort out, and Heartland is twice the size of TJX. Although processes have improved since then, “it’ll be a few months before everything’s pieced together,” Cashman said. Will credit unions have recourse once the impact of the breach is realized? “That’s being sorted out,” Cashman said. In October, CUNA Mutual notified Visa and MasterCard of higher-than-normal fraud activity after credit unions began informing the insurer of a spike in plastic card fraud and related activities. “CUNA Mutual Risk Management detected that something big was happening,” Cashman said. “We reported our findings to both card associations to help facilitate an investigation to determine if a breach had occurred and, if so, its origin.” The company didn’t know the fraud was related to Heartland until the processor issued a release on Tuesday. CUNA Mutual saw about 600 data breaches last year through its alerts. “Many aren’t a major alert,” Cashman said. “Hundreds of small and medium breaches never hit the radar.” CUNA Mutual has offered credit unions two related RISK Alerts issued in late 2008 when fraud activity spiked; a webinar in November and viewed by more than 600 credit unions; a questions and answers document; and talking points to assist credit unions in discussing card fraud with local media. The most recent RISK Alert recommends credit unions review Visa CAMS Alerts or MasterCard Alerts carefully to determine “high risk” exposure for future fraud. Doing so will help them determine what course of action to consider, Cashman said. Some additional recommendations in the RISK Alert include:
* Review accounts involved in the breach. Determine which cards on the card association alerts are still active (open). * Review other accounts. Find out which cards on the alerts are non-active and have been closed due to fraud. Identify if the fraud pattern on the closed accounts matches the fraud pattern described in the card associations’ alerts. * Monitor or block and reissue. Assess compromised cards to determine whether to monitor the affected cards. If opting to monitor, contact the card association (Visa or MasterCard) to determine how the credit union’s action will impact future recovery efforts, otherwise block and reissue the affected cards. Reissued cards will be encoded with new track information, which includes the new CVV/CVC values and card expiration dates.
Credit unions also call CUNA Mutual’s CU Protection Resource Center at 800-637-2676 for more information.

MDDCCUA reports outreach success at NBC4 expo

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COLUMBIA, Md. (1/22/09)--Maryland, Virginia and District of Columbia credit unions involved with the 16th Annual NBC4 Health and Fitness Expo potentially reached more than 85,000 consumers who attended the fair with the credit union difference.
Credit unions from Maryland, Virginia and the District of Columbia exhibited at the NBC 4 Health and Fitness Expo Jan. 10-11. From left are Michael Vasti, NBC4; and Cheryl Pyle Money and Angela Akingbade from One FCU, Largo, Md. (Photo provided by the Maryland and District of Columbia Credit Union Association)
The fair was held at the Washington Convention Center in Washington, D.C., Jan. 10-11, according to the Maryland and District of Columbia Credit Union Association (MDDCCUA). A number of credit unions exhibited at the event with MDDCCUA. Sharon Sykes, MDDCCUA vice president of marketing, said she talked with more than 1,000 consumers who visited the MDDCCUA booth (FOCUS Newsletter Jan. 20). Volunteers also helped 840 consumers find a credit union. “The traffic that we received and the eagerness of so many people to join a credit union was terrific,” Sykes said. “All of the credit unions exhibiting received a great response.” They included:
* DVA FCU; Washington, D.C.; * HEW FCU, Alexandria, Va.; * Prince Georges’ Community FCU, Upper Marlboro, Md.; * State Department FCU, Alexandria, Va.; * Vantria FCU, Springfield, Va.; and * White House FCU, Arlington, Va.
Volunteers at the MDDCCUA booth included Angela Akingbade and Cheryl Pyle, Money One FCU, Largo, Md.; Steve Levin of National Institute of Health FCU, Rockville, Md.; and Stuart Clode of APGFCU, Aberdeen, Md. Sponsorship for the event was funded by the Community Outreach Committee, chaired by MECU CEO Bert Hash.

Breach victims lose confidence in accounts safety

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BEAVERTON, Ore. (1/22/09)--Roughly 45% of card breach victims lose confidence in the safety of their financial accounts as a result of a data breach incident, according to a new study by Javelin Strategy & Research. Credit unions whose members' cards are affected by the Heartland Payment Systems breach, which was announced Tuesday, may need to provide greater member service with those members as a goodwill effort. In a down economy, criminals tend to be opportunistic and creative in their approaches to stealing identity information and depositing malware on computers, said Tom Wills, senior security analyst at Javelin. "More than ever, businesses must be vigilant and proactive in protecting their digital assets," he said. The latest breach is part of a trend of increased use of malicious malware, said Rich Mogull, founder of Securosis, an information technology security consultancy in SCMagazine.com (Jan. 20), a publication for security professionals. With Heartland, there's "now a very clear trend. If you look at the largest breaches that we can definitely link to fraud, all relate to malicious software being installed somewhere in the payment system," he added. In the Heartland breach, once consumers swiped their cards, "sniffer software" captured that data as Heartland sought authorization from the major payment companies and banks and credit unions. Customers of Visa, MasterCard, American Express and Discover Financial are all vulnerable, according to The New York Times (Jan. 21). "We have industry-leading encryption, but the data has to be unencrypted to request the information," Heartland President/Chief Financial Officer Robert H.B. Baldwin Jr. said. He said authorities believe the thieves may be part of an international ring of hackers introducing breaches at a number of financial institutions, he told the Times. The same method of hacking data was employed in other huge data breaches such as the January 2007 TJX Cos. discount retail chain breach, which comprised 90 million card numbers, and last year's Hannaford Bros. grocery chain breach. Both breaches and one of the now defunct CardSystem Solutions, which compromised 40 million accounts, affected many credit unions, which replaced thousands of members' compromised credit and debit cards. "Most corporations today are failing to put a proactive plan in place before a breach happens which has a direct impact on their bottom line through customer retention and reputation management," said Rich Kam, president of ID Experts, which is working with Javelin on research. "Having an incident response plan in place can minimize the impact of a breach, increase response times, and significantly decrease customer attrition rates," he said. The Identity Theft Resource Center reported recently that data breaches were up 47% in 2008, compared with 2007 breaches, which totaled 447.

CU System briefs (01/21/2009)

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* EL PASO, Texas (1/22/09)--Local television station KFOX14 featured Karl Murphy, president/CEO of El Paso-based FirstLight FCU, Friday giving advice to consumers who overspent during the holiday season and now have more credit card debt. He suggested taking the card with the lowest balance, and paying more than the minimum payment on it to pay it off faster. Then move to the next credit card and repeat the process … * WAUSAU, Wis. (1/22/09)--Connexus CU has launched a high-rate, 5.15% Annual Percentage Yield (APY) Xtraordinary Checking account with no minimum balance required and no monthly fees. The more-than-$240 million asset credit union's account is for balances up to $25,000. Accountholders can use any ATM anywhere and receive up to $25 in ATM surcharge rebates monthly. The account also includes free idenity theft protection and a 0.50% APR rate reduction on consumer loans. The Wausau, Wis.-based credit union also offers free ATM/Visa Check Card with unlimited Visa Check (credit) transactions; instant access to deposits made online through Instant Deposit; Free CRIS audio response telephone service; free online banking with bill pay; free eStatements; and direct deposit …

Former auto workers CU severs union ties

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WEST MIFFLIN, Pa. (1/22/09)--Employees of United Community FCU (formerly Auto Workers FCU) decided that they no longer want to be represented by a labor union. The credit union’s 12 employees voted to sever their union relationship after 25 years of Teamster Labor Union representation, said the Pennsylvania Credit Union Association (Life is a Highway Jan. 21). Effective Jan. 15, Teamsters Local 249 of Pittsburgh, has disclaimed any interest in representing the employees of the $35.5 million asset, West Mifflin, Pa.-based credit union, creating a non-union environment.

CU supporter inaugurated as Pa. treasurer

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HARRISBURG, Pa. (1/22/09)--A credit union supporter was inaugurated as Pennsylvania treasurer Tuesday. State Treasurer Rob McCord took the oath of office on Tuesday. This is McCord’s first term as State Treasurer (Life is a Highway Jan. 21). The Pennsylvania Credit Union Association (PCUA) said it looks forward to building a relationship with McCord’s office, especially since he is supportive of the Credit Union Better Choice program--a payday lending alternative developed by PCUA in conjunction with the Pennsylvania State Treasury. The association’s Christina Mihalik, assistant vice president, governmental affairs, and Christine Seitz, governmental affairs specialist, covered the state ceremonies and inaugural receptions.

Beehive CU tables conversion to bank

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SALT LAKE CITY (1/22/09)--A Utah-based credit union that had planned to convert to a mutual savings bank announced it will remain a credit union, citing the nation's economic turmoil. Scott Simpson, president of the Utah League of Credit Unions, said the decision of Salt Lake City-based Beehive CU, was good news. He told The Salt Lake Tribune (Jan. 20) he was sure the credit union's board tried hard to act in its members' best interest. The turmoil in the economy was cited as the reason for the change in plans by CEO Scott Jorgensen, who told the Tribune the credit union board changed its views on what's best for its members. He said the credit union sensed "an extreme reluctance" by federal regulators to approve a new bank charter in the environment. More than 53% of the voting members of the $187 million asset credit union voted early last year to convert. Ballots were cast by about 36% of the credit union's 22,000 members (News Now Feb. 21). At the time, the credit union said a state law that limited the ability of state-chartered credit unions to open branches and attract new members gave Beehive little opportunity to grow.

Speaker CUs will gain market share from crisis

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KEY WEST, Fla. (1/22/09)--Credit union strategies for success during the economic crisis, and benefits programs to recruit and retain key employees were key topics on Tuesday’s agenda at the 2009 CEO Summit in Key West, Fla. Mark Sievewright, senior vice president, corporate marketing and sales at Fiserv, examined “Survival and Success: A New Era in Financial Services.” He told the group that “credit unions will gain market share as a result of the current financial crisis” (Life is a Highway Jan. 21). Sievewright discussed delivery channels that will be important to the success of credit unions. “Online will become the most dominate delivery channel,” he said. “Cell phones will not be primarily used for talking, and mobile banking will be critical to remain in the game.” Michael Downey, executive benefits specialist for CUNA Mutual Group, focused on “Talent, Benefits, and Your Balance Sheet” and addressed executive benefits and compensation. “It is possible to customize executive benefits plans, which can be extremely flexible and determined by personal goals,” he said. The conference ended Wednesday.

Michigan league CU association to combine

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PLYMOUTH, Mich. (1/22/09)--The Michigan Credit Union League (MCUL) and the Michigan Association of Credit Unions (MACU) signed a management contract that will align the two organizations and allow MACU's membership to use MCUL services. The contract keeps the MACU structure and board of directors in place until Dec. 31, 2010, while immediately offering MACU credit unions access to MCUL's services (Michigan Monitor Jan. 26). Ninety-five percent of Michigan’s credit unions are affiliated with the MCUL and MACU structure. MCUL President/CEO David Adams said that keeping the MACU structure for an additional two years will provide oversight of the transition and assure that MACU credit unions’ needs are met. When MACU CEO Linda Schepperly retires March 1, Adams will serve as president/CEO of both organizations. “This alliance is a natural progression, given the incredible rate of consolidation within the credit union industry,” Adams said. “All of the merger activity puts pressure on associations to provide value for the dues dollar. “This alignment will provide value to MACU credit unions, which will benefit from access to a broader suite of services, but I am confident the alignment also will provide value to the entire credit union community in Michigan.” Jim Henmueller, MACU chairman and CEO of Chief Pontiac FCU, Pontiac, said the move “is a positive step toward further unity in the Michigan credit union industry. This agreement provides an enhanced value for MACU credit unions by giving them access to the MCUL’s advocacy efforts, information and education services, fee-based services and opportunities for networking.” “Given the current economy, finding services for less is a must,” said Andy List, MCUL chairman and CEO of Option 1 CU, Grand Rapids. “It should be seen as a welcome sign that credit unions and their associations are finding ways to help credit unions get the services they need from an association at the lowest possible dues cost.” Existing MACU credit unions can participate in the dual-membership arrangement until Dec. 31, 2010. MACU credit unions can join the MCUL and Credit Union National Association directly after Jan. 1, 2011. MACU’s remaining two employees will continue to serve as resources for MACU and MCUL.